Toyota plans to invest up to JPY210bn (US$1.9bn) in Indonesia by 2023 to produce electric and plug-in hybrid vehicles, according to reports in Japan citing Indonesian government sources.

The news merged following a meeting held last week between Toyota Motor president Akio Toyoda and Indonesian government officials on the fringes of the G20 Summit in Japan.

Such an investment would make Indonesia a regional manufacturing hub for the Japanese carmaker to rival Thailand. The company initially plans to produce hybrid vehicles in the country, to be followed by electric vehicle (EV) at a later stage.

It would make Indonesia a key part of Toyota's strategy of selling around 5.5m units electric and plug-in hybrid vehicles globally, or 50% of total sales, by 2025.

Mr Toyoda is quoted separately as saying "the Indonesian government already has an EV industry development strategy, which makes the country a strong candidate for EV investment". It also has significant natural resources that also favour lithium-ion battery production.

Toyota currently has a production capacity of 250,000 vehicles per year in Indonesia and produced over 180,000 built-up vehicles (CBU) in 2018. The company's small-car subsidiary Daihatsu is Indonesia's largest vehicle producer with CBU output of around 512,000 units last year, most of which was supplied to Toyota.