TOKYO: The Japanese automaker Isuzu Motors on Thursday said it was not planning to move a factory from Thailand to Indonesia, a day after the Indonesian industry minister said the company would do so.
“While our company continues to focus on Indonesia as a major market, there are no plans to relocate a Thai factory to Indonesia,” an Isuzu spokesperson said.
The company had made no announcement on the issue, the spokesperson added.
Indonesian Industry Minister Agus Gumiwang Kartasasmita had said on Wednesday that Isuzu planned to move a factory and could start production as early as next year.
A ministry spokesperson on Thursday did not immediately respond to a request for comment on the denial from Isuzu, which already has a factory in Karawang, Indonesia.
Isuzu operates two factories in Thailand employing about 6,000 people.
A senior Indonesian industry ministry official insisted late on Thursday that Isuzu would be relocating a factory to Indonesia.
“Maybe they haven’t really communicated it. But it’s confirmed they want to relocate UD Truck (their truck factory),” Taufiek Bawazier, a director-general at the ministry, told reporters.
Shares of some Thai auto parts companies sold off on Thursday after reports of the earlier comment from the Indonesian minister.
Prices of Aapico HiTech, which makes the chassis frames for Isuzu pickup trucks — the best-selling pickups in Thailand — fell 12% in morning trade on the Stock Exchange of Thailand (SET) against a market index gain of 0.11%.
The auto lighting equipment maker Thai Stanley Electric saw its share price drop 4%. The overall auto sector index fell 3.34%.
Thailand is an auto production and export hub for Southeast Asia and is home to some of the world’s top producers including Toyota and Honda. The government has been trying to maintain that status, rolling out incentives to lure investment for electric vehicle (EV) production.
The Chinese EV maker Great Wall Motor is planning to set up a US$30-million battery pack assembly plant in Thailand, while BYD plans to set up a factory by 2024.
The country produces around 1.5 million to 2 million vehicles each year, exporting half of those.
It cemented its auto credentials with a strong supply chain for auto parts over the last four decades. EVs, however, use far fewer parts than conventional automobiles, forcing the industry to adapt.
The government plans to have EVs make up at least 30% of auto production in the country by 2030.
Indonesia has also been making aggressive moves to build up its auto industry, especially in the area of EVs and batteries, for which it has abundant supplies of raw materials.
Isuzu first entered Thailand in 1966 and has two assembly plants: Samrong in Samut Prakan and Gateway in Chachoengsao. The plants have a combined production capacity of 385,000 vehicles per year.
Isuzu is best known for its D-Max pickup, which led the one-ton pickup market last year for the third year in a row. A total of 390,000 pickups were sold in Thailand in 2022, with Isuzu accounting for a 46% share and the Toyota Hilux 38%.
The company said in December last year that it was waiting for the right moment to launch electric pickups and trucks in the Thai market, which is currently more geared towards passenger EVs.