Toyota Motor and its five affiliated firms are making the move “considering the remarkable growth of the (Indonesian) market in recent years”, a statement from the group said.
The investment will create 9,000 new jobs, raising the group’s total workforce in Indonesia to around 41,000, according to Japanese media.
Toyota Motor’s Indonesian unit, Toyota Motor Manufacturing Indonesia (TMMIN), will buy 150 hectares (370 acres) of land near its two plants in Karawang outside Jakarta to build a new engine plant, the statement said.
TMMIN will increase annual production at one of the Karawang plants from 110,000 vehicles to 130,000 by September 2013 to reinforce supply of pickup trucks, minivans and sports utility vehicles.
The five Toyota group firms are Daihatsu Motor, Toyota Auto Body, Aisin Seiki, Denso and Toyota Tsusho. In the expansion project, Toyota Auto Body will begin vehicle production in December, the statement said.
Daihatsu Motor will also begin construction of its second test track and design centre outside Japan — at one of its Karawang plants — by the end of this year. The six group firms have already invested about 27 trillion rupiah over four decades with Toyota Motor accounting for 9.5 trillion rupiah, the statement said.