Honda Motor Co said on Thursday it would spend about 3.1 trillion rupiah ($337 million) to build a car production plant in Indonesia with an annual capacity of 120,000 vehicles as it tries to meet growth in Southeast Asia’s top economy.
Auto sales in Indonesia hit a record high last year and several automakers, including General Motors Co, Nissan Motor Co and Toyota Motor Corp, have announced plans to expand output in the world’s fourth most populous nation.
The factory, which is due to start operations in 2014, will sit on the property of its existing plant in the Karawang Industrial Park, in a Jakarta suburb, and lift Honda’s total Indonesian auto output capacity to 180,000 cars a year.
The Japanese automaker plans to make small vehicles like its Brio compact eco-car at the factory, which will initially employ about 2,000 workers.
The announcement comes days after Honda said it will build a scooter factory in Indonesia, which will boost its capacity in the world’s third-biggest two-wheeler market by a quarter to 5.3 million motorcycles a year. Toyota, which dominates the Indonesian auto market, announced plans in September to spend 2.9 trillion.