Hyundai Motor confirmed it had almost completed construction of its new car plant in Indonesia with pre-production set to begin in May, according to local reports.

Hyundai Motor chief operating officer for the Asia-Pacific region, Lee Kang Hyun, during a visit to Indonesia, confirmed the facility would have an initial annual capacity of 150,000 vehicles per year although he admitted he did not expect output to reach anywhere near capacity levels for several years.

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Capacity at the site, located in Kota Deltamas, an integrated industrial, commercial and residential district east of the capital city Jakarta, can be expanded to 250,000 units/year at a later stage depending on demand.

Hyundai sold just 740 vehicles in Indonesia last year, according to wholesale data released by local industry association Gaikindo, with Kia delivering a further 807 units.

The new plant will produce vehicles for the local market and for export to neighbouring ASEAN countries, starting with conventional internal combustion engine vehicles. An electric vehicle is expected to go into production in 2022.

Hyundai Motor sees Indonesia as ASEAN's most promising market, mainly due to its population size which is estimated currently at around 270m people. Local production will allow the South Korean automaker to challenge the Japanese dominance of this market on a more equal footing.

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The automaker chose Indonesia over Thailand following extensive meetings between senior Hyundai executives and representatives of the Indonesian government over a period of a few years, culminating in a meeting in Jakarta in 2019 between Indonesian president Joko Widodo and the then executive vice chairman of Hyundai Motor Chung Euisun.

Widodo also visited the Hyundai Ulsan plant in South Korea that same year.
The South Korean automaker established a new sales and distribution company, Hyundai Motor Indonesia, last year to help drive sales growth.