Japan's Nissan Motor began construction this week of a new engine and transmission production facility at its existing plant in Purwakarta in the Indonesian province of West Java.

The new IDR436bn (US$33m) facility will have a capacity to produce 96,000 sets per year and will be managed by the automaker's majority-owned local subsidiary Nissan Motor Indonesia (NMI).

NMI's Purakarta plant has production capacity of 250,000 vehicles per year on full shifts after a second 100,000 unit/year production line was completed in May 2014 at a cost of JPY33bn (US$324m at the time).

Nissan has struggled to meet its sales targets in Indonesia since the second vehicle assembly line came on stream, partly due to the overall weakness in the vehicle market but also due to strong competition from Honda and Toyota-Daihatsu.

The company sold 54,000 Nissan and Datsun vehicles in the country in 2015 and 27,000 units in the first half of 2016. It hopes the new engine and transmission plant will help strengthen its operations and sales potential in the country.