Suzuki to Invest $780 Million in Indonesia to Boost Engine, Car Capacity

Suzuki Motor Corp. (7269), the third-biggest carmaker in Indonesia, will spend 60 billion yen ($780 million) to increase capacity in the Southeast Asian nation, including setting up another factory to build engines.

The new plant will help triple engine-making capacity in Indonesia, Suzuki said in an e-mailed statement today. The investment includes 40 billion yen on the engine plant to open in 2014 with the rest spent on auto assembly lines, Hideki Taguchi, a company spokesman, said by telephone. He said the timeframe for the total investment hasn’t been decided.

Suzuki, which has one plant for automobiles and another for motorbikes in Indonesia, plans to increase auto output capacity 25 percent to 100,000 units a year and to start producing seven- seat vehicles in Indonesia from this spring. In September, Toyota Motor Corp. (7203), the biggest carmaker in Asia, said it planned to spend 26.3 billion yen to build a second factory in Indonesia.

Suzuki shares gained as much as 3.9 percent, the most intraday since Sept. 20, in Tokyo trading. They were up 3 percent to 1,639 yen as of 1:15 p.m.

In 2010, Suzuki made 560,000 motorbikes and 75,000 cars in Indonesia.

To contact the reporter on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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