Honda Builds Motorcycle Plant in Indonesia image

Honda Motor plans to boost its motorcycle production capacity by a fourth until 2013, and as part of the plan the company will build a factory in Indonesia.

With the new plant, the company will be able to produce 5.3 million units annually in the world’s third-largest motorcycle market, where it controls a majority share. The joint venture with the local automaker PT Astra International Tbk will cost around $364.87 million and will produce the well known 125cc automatic transmission scooters.

Last year Honda managed to manufacture 15 million motorcycles around the world and for this year it aims to lift output to 20 million units in fiscal 2013 through increased production in Indonesia, India and elsewhere. The 125cc engine features 25% better fuel consumption and will be built into scooters manufactured and sold mainly in Southeast Asia and developing countries. It is expected that in the following two or three years, this new engine to replace three different engines used in different regions. The 700cc mid-size engine will be manufactured at Honda’s factory in Kumamoto, targeted at advanced countries. With new developed engines, Honda’s plan to double worldwide sales of two-wheelers in 10 years to 30 units could become reality.