P T Honda Prospect Motor (HPM), Honda's joint venture firm in Indonesia, has started construction of its new IDR3.1 trillion ($328m) automobile production plant in Karawang Industrial Park in a suburb of Jakarta.
The new automobile plant, which will have an annual production capacity of 120,000 units, is scheduled to start production in 2014 to meet the demand in the growing automobile market in Indonesia.
HPM is planning to build new multi-purpose vehicle (MPV) model at the new plant, based on BRIO, which was developed for Asian markets.
Combined with the current capacity of 60,000 units, the company's total annual production capacity will be 180,000 units.
The company will strengthen local product planning and development function, establish a production system, and increase local content to about 80% from the current level of 50%.
By the end of this year, the company aims to start importing BRIO from Thailand, and then start local production of an Indonesian version of the model at the existing plant before the end of 2013.
Honda Motor president and CEO Takanobu Ito said that Indonesia became the largest automobile market among ASEAN countries last year.
"We believe this new factory will contribute positively to the general industry and economy in Indonesia, while creating new working opportunities for people here," Ito said.
"Concurrent with the launching of BRIO and other new products, we will continue the effort to maximize the joy of our customers, with speed, affordability and low CO2 emissions."
