Toyota owns 51 percent of Daihatsu and is hoping to set up a supply network through Southeast Asia using it

OSAKA, Japan (CNN) -- Daihatsu Motor Co. will start making low-priced minivans in Indonesia for export, according to a report.

The company will begin making the minivans in 2003 for the Southeast Asian market, the Nihon Keizai Shimbun said Wednesday.

It will price them at 1 to 2 million yen ($8,500 to $17,000), the low end of the market, the Nikkei states, quoting unnamed company sources.

Japan's companies have long looked to overseas manufacturing bases to reduce labor and land costs.

But Daihatsu's move is part of the second wave among the vehicle makers, which are now using their overseas factories as export bases.

Daihatsu plans to begin rolling out the vans in mid-2003, at its P.T. Astra Daihatsu Motor subsidiary in Jakarta, Indonesia.

Boosting investment

The model will be based on the Taruna minivan already being made in Indonesia, which is called the Terios in Japan.

Just last month, the Japanese small-car maker boosted its investment in the Astra subsidiary to 62 percent from 40 percent. It also turned a joint venture in Malaysia into a subsidiary.

It said at the time that it aimed to boost production and sales in Indonesia to capitalize on the liberalization of Southeast Asian car markets.

The Association of Southeast Asian Nations is set to lower tariffs for car imports in the near future.

According to the Nikkei, Daihatsu will initially make 40,000 of the cheaper minivans in Indonesia but will boost that gradually.

It plans eventually to export the Indonesian minivans outside of Southeast Asia, to China, India, the Middle East and Latin America.

Part of Toyota network

Osaka-based Daihatsu specializes in low-end, small passenger cars. Toyota owns 51 percent of the company.

When contacted, the company did not immediately respond to the report.

Daihatsu makes about 600,000 cars of its own each year. But it also assembles around 140,000 Toyotas a year on a contract basis and supplies Toyota with 40,000 Daihatsu-made cars under Toyota's brand.

Toyota is keen to establish a network of affiliated companies in Southeast Asia that can use the same supply system.

Rival Japanese automaker Honda Motor Co. began joint supply operations between Thailand and Indonesia this month, and is using a Thai manufacturing base to export its City car in Southeast Asia, the Middle East and Africa.

Nissan Motor Co. plans to export Cefiro cars and small trucks from Thailand to Indonesia.

Suzuki Motor Corp. exports from an Indian manufacturing base, shipping Alto subcompacts to Europe, the Middle East and South Asia.