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Hyundai Motor Pushing to Set Up Car Production Factory in Indonesia
Plant Construction Expected to Start in June
Hyundai Motor Pushing to Set Up Car Production Factory in Indonesia
  • By Jung Min-hee
  • February 14, 2019, 12:16
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The compact SUV “Kona” from Hyundai Motor

Hyundai Motor is moving to establish a car production plant in Indonesia. The company has recently asked its domestic partner companies if they could join the development of a new car to be launched in Indonesia in 2021.

Hyundai Motor is expected to invest about seven trillion rupiah (about US$500 million) in the Cikarang Industrial Complex near Jakarta, the capital of Indonesia, to build a plant with an annual production capacity of 250,000 units.

Hyundai Motor sent an official letter to its domestic partner companies at the end of last month to find out whether they would participate in the development of a new car for the Indonesian market. Auto industry watchers say that the letter was intended to find out the partners’ parts delivery methods and parts production plans prior to start collaboration.

As the letter specifically mentioned the region where the partner companies would set up plants, they say that Hyundai Motor is close to opening a plant in Indonesia, which has been rumored. Media outlets in Indonesia have reported that Hyundai would build a plant in the Southeast Asian country.

Hyundai Motor is expected to start preparations to set up the factory in June this year, aiming to sell cars from the factory beginning in the second half of 2021. The factory is highly likely to roll out SUVs which have recently become the mainstream of the automobile market. The Korean automaker is also considering adding multi-purpose vehicles (MPVs) and passenger cars to the factory’s product lineups. Production of eco-friendly cars such as electric cars is also expected. Indonesia is rich in nickel latex ore, an essential material for lithium-ion batteries for electric vehicles.

All of these models are based on the B segment (compact cars). The small SUV Kona belongs to the B segment. Auto industry analysts say that Hyundai Motor will determine the product lineup for Indonesia by taking into account its income level and demand.