TOKYO: Japan's Honda Motor plans to invest more than US$100 million to increase its motorcycle production in Indonesia in response to growing demand there, a report said Monday.

Honda will spend more than 10 billion yen (US$109 million) to raise capacity at a factory that it jointly operates with PT Astra International, by 20 per cent to 3.6 million units, the Nikkei business daily said.

Indonesia is Honda's second-largest market for motorcycles, after India. The expansion of the factory is targeted to begin in 2010, the report said, without naming its sources.

A Honda spokeswoman said "nothing had been decided" about whether to expand the motorcycle business in Indonesia.

Honda has weathered the global economic downturn better than its two main Japanese rivals, Toyota and Nissan, partly due to brisk demand for its motorcycles, particularly in emerging economies.

- AFP/yb