Indonesia’s largest vehicle manufacturer, PT Daihatsu Astra Motor, is building a second plant in Indonesia, in Karawang – some 70km (40 miles) east of Jakarta.

The plant will produce a small, Etios-based low-cost car for sale under the Daihatsu and Toyota brands from the end of 2012. The Indonesian government is expected to announce new incentives and lower taxes designed to encourage the production and purchase of small cars in the country.

Daihatsu expects to invest around IDR2.1 trillion (US$244m) in the new 100,000-unit/year assembly plant, excluding land acquisition costs. 

Toyota will take around 70% of the output and Daihatsu the remainder. The cars are expected to be priced at around $10-11,000 for entry-level models. The production target for the first full year (2013) is 50,000 units.