Hyundai Motor signed a preliminary agreement with Indonesian conglomerate Artha Graha (AG) Group to establish a joint venture to assemble and supply commercial vehicles to markets across south east Asia.
The agreement was signed at the Indonesian embassy in Seoul by Lee In-cheol, the head of Hyundai's commercial vehicle exports, and AG Group vice-chairman Iki Wibowo.
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The joint venture is scheduled to be up and running by May 2018 and will manage local assembly, sales and aftersales activities in Indonesia.
It will initially target the domestic commercial vehicle market which is rebounding strongly after four years of sharp losses. This will provide a platform from which to export to neighbouring markets including Malaysia and Thailand.
Commercial vehicle sales in Indonesia are estimated to have increased by 15% to 185,000 units in the first nine months of 2017. The market is dominated by Japanese brands with Europeans and Chinese accounting for limited volumes – mainly in the heavy truck segment.
Local assembly of knocked down trucks imported from South Korea is scheduled to begin in the second half of 2018 with a targeted output of 2,000 units per year.
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By GlobalData
