JAKARTA, Indonesia—Japan’s Mitsubishi Motors Corp. said it will build a new car factory in Indonesia as part of a plan to raise its production capacity in the country from 160,000 to 240,000 vehicles per year.
Chief executive Osamu Masuko said the automaker will invest US$600 million in the assembly plant.
He said construction is expected to begin in May next year in Bekasi, a West Java town just east of the capital Jakarta.
The plant would begin production of multi-purpose vehicles in 2017, Masuko said after a meeting with Indonesia’s Minister of Industry M.S. Hidayat.
Multi-purpose vehicles are also known as people carriers because they comfortably transport more people than regular cars.
Masuko said the growth potential of Indonesia, the world’s fourth most populous nation with 240 million people, was a reason for building the plant.
The factory’s annual production of 80,000 vehicles would mostly be sold locally with about a quarter exported to the Philippines, Thailand, Vietnam and other countries.
The Association of Indonesian Automotive Manufacturers expects Indonesia’s car sales to increase by 10 per cent this year to 1.3 million vehicles, helped by sales of low cost green cars.