Tokyo  - The Japanese car and motorcycle maker Honda Motor Co plans to increase its annual production capacity of motorcycles in Indonesia by 20 per cent to 3.6 million units, a Japanese business daily reported Monday.

Honda plans to invest more than 10 billion yen (109 million dollars) through 2011 for the expansion, the Nikkei reported. The respected newspaper did not cite sources for its report.

A spokeswoman at Honda in Tokyo said nothing has been decided on the issue.

Nikkei said, however, that Honda would add production facilities in Indonesia to expand sales amid brisk demand in one of the fastest-growing markets in the world.

PT Astra Honda Motor, a joint venture with PT Astra International, Indonesia's largest automaker, would expand one of its three existing factories by building a new facility that would have annual output capacity of 600,000 units, the paper said.

Construction is slated to begin in 2010 with the launch of operations targeted for 2011, it said.

Indonesia is currently Honda's second-largest market for motorcycles after India. It sold a record 2.87 million units in 2008.

The global financial crisis slowed sales sharply at the end of 2008, but demand has picked up since the middle of this year, the paper said. (dpa)