Renault plans to invest $US600m investment on a new vehicle plant in Indonesia, a local newspaper said on Friday.

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Bisnis Indonesia cited the head of Indonesia’s investment coordinating board, Muhammad Lutfi, as saying Renault had sent a letter to his office requesting government assistance to find suitable land and to set up necessary infrastructure, according to Reuters.


“We and the industry ministry are currently working on the package, including asking the governor of Central Java to prepare the area since one of the locations that they are considering is Kendal,” Lutfi was quoted as saying.


Reuters said Kendal is a coastal town on Indonesia’s main island of Java, located 390km (240 miles) east of the capital Jakarta. Most vehicle plants in Indonesia are located in industrial towns in the eastern outskirts of Jakarta.


The news agency noted that, in June, Lutfi was reported by the same newspaper as saying that Renault’s plant would have a capacity to produce 150,000 to 200,000 vehicles a year, to cater for domestic and export markets.

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Lutfi also said an agreement would be signed in September during President Susilo Bambang Yudhoyono’s visit to France.


Renault set up dealerships in Indonesia several years ago, but its sales volume remains low as its products are more expensive than those of Japanese rivals, which have production bases in Southeast Asia’s largest economy, Reuters said, adding that last year it sold only 19 vehicles out of the country’s total of 318,883 units, according to industry data.