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UPDATE 1-Honda to spend $337 mln on new Indonesia car plant
* Factory to have capacity of 120,000 vehicles a year
* Honda's annual Indonesia capacity to rise to 180,000 cars
* Comes after plan to build 4th Indonesia motorcycle plant
TOKYO, March 15 (Reuters) - Honda Motor Co said on Thursday it would spend about 3.1 trillion rupiah ($337 million) to build a car production plant in Indonesia with an annual capacity of 120,000 vehicles as it tries to meet growth in Southeast Asia's top economy.
Auto sales in Indonesia hit a record high last year and several automakers, including General Motors Co, Nissan Motor Co and Toyota Motor Corp, have announced plans to expand output in the world's fourth most populous nation.
The factory, which is due to start operations in 2014, will sit on the property of its existing plant in the Karawang Industrial Park, in a Jakarta suburb, and lift Honda's total Indonesian auto output capacity to 180,000 cars a year.
The Japanese automaker plans to make small vehicles like its Brio compact eco-car at the factory, which will initially employ about 2,000 workers.
The announcement comes days after Honda said it will build a scooter factory in Indonesia, which will boost its capacity in the world's third-biggest two-wheeler market by a quarter to 5.3 million motorcycles a year.
Toyota, which dominates the Indonesian auto market, announced plans in September to spend 2.9 trillion rupiah to build a factory and roll out a model in the Southeast Asian country.
Demand for cars and motorcycles in Indonesia is expected to grow 5 percent this year, slower than the previous year, amid the possibility of higher fuel prices, the head of the country's biggest auto distributor, PT Astra International, said late last month.
In 2011, car sales jumped 17 percent to hit a record of 894,180 vehicles, and motorcycle sales rose 7.3 percent, according to data from Indonesian industry groups.
http://www.reuters.com/article/2012/03/15/honda-indonesia-idUSL4E8EF1K020120315
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