Honda Motor Corp, has started the construction of a new automobile production plant in Karawang Industrial Park in a suburb of Jakarta – Indonesia.
The company is investing 3.1 trillion rupiah, or roughly 25 billion yen, in the Karawang plant, as other Japanese automakers are similarly expanding production in the emerging economy.
According to the automaker, when is done in 2014, the factory will be capable to produce 120,000 new vehicles annually.
In addition to BRIO, which was developed especially for Asian markets, Honda is planning to produce a new MPV (Multi-Purpose Vehicle) model at the new plant. Designed based on BRIO, the new model will enhance the Honda lineup of MPV models which account for the majority of passenger vehicle sales in Indonesia, the automaker said.
In addition to vehicle assembly, Honda’s investment will strengthen its local product planning and development functions.
The automaker aims to increase local content to 80% from the current level of approximately 50% in its Indonesian production. Despite this big-ticket investment, Honda has retained its option to enhance its production capacity and product line-up in Indonesia in the future.