Nissan to invest $400 mln in Indonesia plant to boost capacity image

Japanese carmaker Nissan Motor Co. Ltd. plans to invest $400 million in its Indonesian assembly plant to boost its production capacity, a minister said on Monday.

“They planned to invest in Cikampek (West Java) with an investment value of $400 million, higher from its initial plan of $100 million,” Industry Minister M.S Hidayat said.

“They want to increase production capacity from 100,000 vehicles per year to 250,000 vehicles by 2014,” he said.

In addition, Industry Minister M.S Hidayat told reporters that Nissan aims to produce 250,000 units annually at its West Java plant starting 2014 compared with 100,000 units currently.

The announcement comes shortly after Honda said it plans to open a new car manufacturing plant in Jakarta, Indonesia by investing 3.1 trillion rupiah ($337 million). The plant, which will be located in Karawang Industrial Park, will produce small cars like Brio compact.

Indonesia has become a manufacturing hot-spot due to its lower wage structure. As a result, many global automakers includingGeneral Motors Co. (GM), Nissan Motor Co. (NSANY) andToyota Motor Corp. (TM) are planning to expand their operation in the country.

Car sales in Indonesia leapt 24.2 percent year-on-year in February as increased supply met pent-up demand among consumers in Southeast Asia’s largest economy.