Hyundai Motor has signed a Memorandum of Understanding (MOU) with the Indonesian government to build vehicle manufacturing plant in Kota Deltamas, east of Jakarta. The move deepens Hyundai’s presence in a country and region with bright long-term automotive demand prospects.
Output at the plant is planned to start in the second half of 2021 with initial annual capacity of 150,000 units and full production capacity to reach approximately 250,000 units annually.
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The new plant represents an investment of approximately USD1.55 billion until 2030, including product development and operation costs. South Korea and Indonesia have recently signed an FTA, which is thought to have prompted the announcement from Hyundai.
A compact SUV, compact MPV and sedan models for the southeast Asian market will be produced at the new plant and Hyundai says ‘EV production also being explored’.
The company also says Hyundai will pursue ‘innovative differentiation’ to gain a competitive edge over competitors; this includes build-to-order (BTO) manufacturing and ‘omni-channel retail’.
“The establishment of Hyundai Motor’s manufacturing plant in Indonesia has been made possible thanks to the continuous cooperation and support from the Indonesian government,” said Euisun Chung, Executive Vice Chairman of the Group. “Hyundai will continue to listen actively and respond to the Indonesian government’s expectations and policies regarding eco-friendly vehicles, while continuously contributing to the ASEAN community.”
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By GlobalDataThe new plant will incorporate facilities for stamping, welding, painting and assembly.
Hyundai says it is also currently exploring the production of ASEAN-specific electric vehicles (EV) in its Indonesian plant. Hyundai, together with sister company Kia Motors Corporation, aims to make Hyundai Motor Group the world’s third-biggest EV manufacturer in the world by 2025.
Hyundai, with its local partner suppliers, expects to create more than 23,000 new direct and indirect jobs at the Indonesian plant, becoming one of the biggest automotive employers in the Kota Deltamas district. The plant is anticipated to make an economic contribution worth more than USD 20 billion to the Indonesian economy over its first decade.
In order to develop strategic vehicle models perfectly tailored for the region, Hyundai Motor has established a dedicated organisation and is currently operating a system in which its headquarters and Indonesia operations seamlessly collaborate on all aspects of product development and mass-production processes.
In terms of production and sales, Hyundai says it will take a strictly customer-centric approach. Vehicles produced at the new facility will be on a build-to-order basis. As commercial production commences, Hyundai also plans to implement a brand new integrated online-offline-mobile retail channel, or omni-channel, with local e-commerce leaders ‘to optimise sales and customer experience in Indonesia’.
This focus on the next generation of motorists continues with plans to offer more online services and enhanced connected services, such as voice command, vehicle control, and in-vehicle shopping. To support its new presence in the market, Hyundai aims to establish a nationwide network of around 100 dealers by 2021. This will expand gradually to grow the customer base further.
Indonesia, the largest automobile market in the ASEAN region, recorded 1.15 million units in annual sales last year and is considered a potential high-growth automotive market.
Key ASEAN countries including Indonesia, Thailand, Malaysia, Vietnam and Singapore and they are expected to create an automotive market of approximately 4.49 million units in 2026, growing from 3.16 million units in 2017.
