Honda to open new motorcycle plant in Indonesia in 2013 image

Japan’s third-largest automaker Honda Motor said Tuesday its Indonesian joint venture will spend 3.1 trillion rupiah ($340 million) to set up a new scooter factory in Indonesia.

The Japanese giant will boost its production capacity to 5.3 million motorcycles per year.

“The plant will produce around 1.1 million motorcycles per year, adding to our production capacity of between 4.2 million and 4.3 million units annually,” Loman told The Jakarta Post in a telephone interview.

In addition, the new plant will add 3,000 new jobs Honda said.

Honda, which builds and sells motorcycles in Indonesia through a venture with PT Astra International, has been looking to build a new factory as it aims to widen the gap with No. 2 brand up Yamaha Motor Co.

The motorcycle market of Indonesia is the world’s third-biggest market next to China and India, and the further expanding demand is expected on the back of the steady economic basis in recent years.

Motorcycle sales rose to 8 million units in 2011 in Indonesia, up 9 percent from a year earlier, according to preliminary data provided by the Indonesian Motorcycle Industry Association (AISI).