Hyundai Motor Company has signed a Memorandum of Understanding (MOU) with the Indonesian government to build its first manufacturing plant in the country.
The plant will be built on a 77.6-hectare site in Kota Deltamas, a district in the eastern outskirts of Jakarta. Hyundai said its decision to invest in Indonesia was made to support its growth into new ASEAN markets, which it expects will help it withstand slowing demand in the global automotive market.
“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 Hyundai Motor 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.”
Hyundai will invest approximately US$1.55 billion in the plant until 2030, including product development and operation costs, with construction to begin in December this year. The company expects to begin producing vehicles in the second half of 2021 with an annual capacity of 150,000 units, but the plant will eventually be able to build around 250,000 vehicles annually when it reaches full capacity.
The company plans to produce compact SUV, compact MPV, and sedan models specifically designed for customers in South-East Asia at the new plant, which will incorporate facilities for stamping, welding, painting and assembly. Hyundai believes that more than 23,000 direct and indirect jobs will be created at the factory, and will explore production of ASEAN-specific electric vehicles there too.
Vehicles produced at the new facility will be on a build-to-order basis and, as commercial production commences, will also implement a new integrated ‘online-offline-mobile’ retail channel with local businesses to optimise sales and customer experience in Indonesia.