JAKARTA, May 1 (Reuters) -Motor Corp.'s minivehicle unit Daihatsu Motor Co. plans to invest 1.2 trillion rupiah ($132.1 million) in Indonesia to boost its annual capacity to 150,000 units, a local newspaper reported on Tuesday.
The expansion is part of a plan to double capacity at PT Astra Daihatsu Motor, the carmaker's local distributor, to 270,000 vehicles a year by 2010.
Bisnis Indonesia quoted Astra Daihatsu President Director Hideku Nomura as saying the capacity increase was necessary to meet rising domestic demand and potential exports.
He said the expansion would take place in October, along with preparing Astra Daihatsu Motor to boost exports.
Daihatsu has production capacity of 114,000 cars a year, or around 9,600 units a month, but has had to increase shifts and working hours to boost monthly output to 13,000 units to meet demand.
Daihatsu has introduced a number of fuel-efficient models in Indonesia such as the Xenia mini-van and Terios small-SUV, which have won drivers since a big fuel price hike in October 2005.
Last year the company increased its market share in the world's fourth most populous nation to 10.4 percent from 9.1 percent in 2005.
Indonesia's vehicle sales dropped by around 40 percent last year as sales were hit by high interest rates and lower purchasing power following the 2005 fuel price hike.
Vehicle sales fell to 318,883 units in 2006 from a record 533,910 units in 2005. Some analysts predict volumes may recover to 350,000-400,000 units this year and return to 2005 levels next year.
Daihatsu shares, valued at around $3.6 billion, have dropped 16 percent so far this year. Last week, the company posted record annual sales and profits, but warned of a fall in current year operating profit.
PT Astra International Tbk , Indonesia's biggest automotive distributor, holds around a third of Astra Daihatsu.