By I Made Sentana

JAKARTA, Indonesia--SAIC-GM-Wuling Automobile Co. on Friday began the construction of a $700 million car plant in Indonesia with a maximum annual capacity of 150,000 units.

The joint venture of SAIC Motor Corp. (600104.SH), General Motors Co. (GM) and Wuling Motors Holdings Ltd. (0305.HK) will produce mini-commercial, multi-purpose vehicles in the 600,000 square-meter plant in Bekasi, located about 70 kilometers east of capital Jakarta.

This is the company's first plant outside China.

The plant's assembly section is expected to be constructed by late 2017, followed by the construction of a facility to manufacture spare parts.

"Indonesia is the largest economy in Southeast Asia, with large market for cars," SGMW Vice President Yuan Zijhun said.

The company's decision to build a plant in Indonesia comes as car sales have fallen since the second half of 2013, reflecting its confidence in the long-term potential of the Southeast Asian economy.

Meanwhile, GM said earlier this year it will shut its Bekasi assembly plant after failing to gain significant market share to sustain operations. The company said it will import cars from its Thailand plant to sell in Indonesia.

Write to I Made Sentana at i-made.sentana@wsj.com

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(END) Dow Jones Newswires

August 21, 2015 01:07 ET (05:07 GMT)

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