Feb. 5 (Bloomberg) -- Yamaha Motor Co., the world's second- largest motorcycle maker, plans to increase production capacity at its factories in Indonesia by 25 percent by 2010 to meet growing demand in the country.

The company will raise annual output capacity in the country to around 3 million motorcycles from the current 2.4 million, company spokesman Takashi Kitagawa said in a telephone interview today. It has two factories in the country.

The plan is part of three-year business plan to be released later today, he said.

Yamaha will spend 10 billion yen ($98 million) to increase capacity, the Nikkei newspaper reported earlier today, without saying where it obtained the information. Indonesia is the world's third-largest motorcycle market, with sales of 5 million units in 2007, the newspaper said.

To contact the reporter on this story: Kiyori Ueno in Tokyo at kueno2@bloomberg.net

Last Updated: February 4, 2008 19:03 EST