French car maker Renault is looking at starting production in Indonesia. Thailand and Indonesia are locked into battle to become the region's centre for car production, with the prize being a regional market of about half a billion increasingly affluent consumers.
Indonesia is already home to Daihatsu, who recently invested $US130 million ($A147 million) to increase the annual capacity of its existing plant in Jakarta by more than 40 percent. Renault on the other hand plans to invest $600 million in a new factory with the capacity to produce 150,000-200,000 vehicles a year for the domestic and export markets.
Renault is already selling cars in Indonesia, although not very many. Out of the 318,883 cars sold in Indonesia last year, Renault managed only 19 vehicles! Nonetheless, Renault's alliance partner Nissan sold almost 13,000 cars. Indonesian car sales are expected to recover to 400,000 next year and top 500,000 by 2009.
With more and more European manufacturers keen on expanding into Asian markets, the next decade should see a whole range of European-badged cars coming out of Asia. The question then is whether or not Asian made Euro cars will come to Australia!