Volkswagen plans to begin construction of a new car assembly plant in Indonesia by the end of 2011, according to government industry minister MS Hidayat.

Bapak Hidayat said he had discussed the plan with Volkswagen on the fringes of the recent ASEAN-European Union business summit in Jakarta. He suggested the German company has a ”blueprint” in place for the project.

The minister added that this is “good news for the domestic automotive industry” as the European automotive industry does not have a significant presence in Indonesia at present. 

Volkswagen announced two years ago plans to build a plant in Indonesia for the assembly of the Touran compact MPV, but this was put on hold while it focused on plans to expand its operations in Malaysia.

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Volkswagen to start Indonesia assembly