Despite the stagnant local auto market, Vietnam Suzuki Corp., a subsidiary of the Japan Suzuki Motor Corporation Japan , broke ground for an automobile factory in southern Dong Nai province on April 25.

The new factory, which will be built next to the existing Suzuki motorbike factory in Long Binh Industrial Park in Dong Nai's Bien Hoa city, will make 5,000 auto units per year when it becomes operational in 2013, according to Osamu Suzuki, president and CEO of the Japan Suzuki Motor Corporation.

Suzuki will invest 13 million USD in the new factory, which will raise its output to 10,000 units and 20,000 units per year in the following years.

The new project brings Suzuki's investments in Vietnam Suzuki Corp to 57.9 million USD.

With an aim to localise its production lines at the factory by 50 percent, Suzuki Vietnam may export auto components to other Suzuki automobile plants in Asia, including those in Thailand , Indonesia , India and Pakistan . Those countries will also export components to Vietnam , said Osamu.

Le Duong Quang, Deputy Minister of Industry and Trade, said investments from Japan and Suzuki in Vietnam indicate Suzuki's and Japanese investors' confidence in Vietnam 's investment environment.

Quang said the Vietnamese government has decided that auto manufacturing will be one of the major industries to be developed in the country.

Vietnam Suzuki Corp began to manufacture motorbikes at Binh Da factory in Dong Nai in 1996.

The company, which employs 600 people, opened its factory in Long Binh Industrial Park in 2006, making 80,000 motorbikes per year. -VNA