Suzuki will invest $611.4 million to build a new facility in Indonesia, part of its strategy to expand in this region.
Suzuki, which is the fourth biggest automaker by sales in Japan, wants to build small vehicles in Indonesia, which are to be based on the fuel-efficient 660 cc mini car “Wagon R”, which is currently sold in Japan.
According to spokesman Ei Mochizuki, the automaker will be exchanging in Indonesia the 660 cc engine for ones with a bigger displacement, but did not offer information about the facility’s capacity or when will the production begin. Suzuki currently has one plant in Indonesia.
In 2012 automakers sold more than 1 million vehicles in Indonesia, a country which recently signed into law a Low Cost Green Car program to encourage small vehicle sales, but the move is still on pending review. Suzuki and some of its peers, including Toyota and Honda, plan to use their Japan-only mini car technology to expand their presence in emerging markets, targeting the fast growing middle class.
The new generation of the Suzuki SX4 is expected to boost the company’s sales thanks to its larger size, new technologies and new rivals, such as the Nissan Qashqai. The new generation of the Suzuki SX4 has been officially presented to the public during the 2013 Geneva Motor Show in a premiere, several months ago.