Isuzu Moves Truck Factory Production Base From Thailand to Indonesia

Minister of Industry Agus Gumiwang Kartasasmita continued his business visit agenda in Japan and held a meeting with the leaders of Isuzu Motors Ltd. in Tokyo on Tuesday (6/6). During the meeting, the Minister of Industry shared the outcomes, stating that Isuzu has announced its decision to relocate its truck factory from Thailand to Indonesia and commence production in 2024.

The factory being transferred is responsible for the production of UD Trucks, which were previously owned by Volvo and acquired by Isuzu in 2019. Expressing gratitude for Isuzu’s decision, the Minister of Industry expressed his hopes for a smooth transition of the production base. He emphasized that the government would prepare various equipment and facilities, including attractive incentives, to support the factory relocation process.

In Indonesia, Isuzu’s factory in Karawang currently boasts the highest utilization rate, reaching an impressive 85%. In 2022, the factory produced 44,694 units, accounting for 15% of Isuzu’s global production. Additionally, Isuzu Indonesia shipped 8,254 Completely Built Units (CBU) of this vehicle type last year. Looking ahead to 2023, Isuzu aims to increase its exports to more than the 25 countries it served in the previous year. As a result, Isuzu is seeking assistance from the Indonesian Government to facilitate smooth transportation for its exports, as stated by Yasuyuki Niijima, the Chief Executive Officer of Isuzu Motors Ltd.

The Minister of Industry has expressed a desire for Isuzu to enhance the utilization of domestic equipment in its assembly process, particularly by encouraging a shift from Completely Knocked Down (CKD) vehicles to Import Completely Knocked Down (IKD) vehicles. This initiative aims to boost the consumption of domestic appliances.

“We appreciate Isuzu’s decision…we will provide incentives and will support the relocation process,” the minister said in the statement.

Regarding the expansion of Isuzu’s foreign market, specifically in Africa, the Minister of Industry has urged efforts in that direction. In response, Niijima, a representative of Isuzu, acknowledged the significant potential of the African market. He stated, “We will closely monitor production levels in Indonesia while actively exploring opportunities in the African markets.”

Isuzu’s factory in Indonesia presently manufactures Isuzu Traga commercial vehicles, which are exported to various countries, predominantly the Middle East and the Philippines. Niijima emphasized the importance of Indonesia to Isuzu as both a market and a production hub. Isuzu aims to increase its sales presence in 150 countries. Additionally, Niijima mentioned that with the commencement of UD Trucks production in 2024, Isuzu will need additional employees.