Hyundai Motor finishes first Asean plant in Indonesia

Indonesian President Joko Widodo autographs an Ioniq 5 at an event celebrating Hyundai Motor's completion of a plant in Bekasi, Indonesia. [HYUNDAI MOTOR]

Hyundai Motor celebrated the completion of a $1.55 billion manufacturing plant in Indonesia Wednesday, the Korean automaker’s first in the Asean region.

The company held a ceremony Wednesday at the plant in Bekasi in West Java, with Hyundai Motor Group Chairman Euisun Chung and Joko Widodo, President of Indonesia, attending.

The factory, which was built on a 777,000-square-meter (8.4 million-square-foot) site, will have annual production capacity of 150,000 units by the end of the year.

Hyundai intends to expand the capacity to 250,000.

Hyundai’s Ioniq 5s, Creta SUVs and Santa Fe SUVs will be produced there. They will be shipped to Southeast Asian nations such as Vietnam, the Philippines and Thailand. Those exports will be exempt from tariffs thanks to the Asean Free Trade Area agreement.

The plant symbolizes the company's pivots away from China and toward the fast-growing Southeast Asian market, including Indonesia, Vietnam and Thailand, markets that are traditional strongholds of Japanese carmakers.

“Indonesia is a key hub for Hyundai Motor’s future mobility strategy,” Chairman Chung said during the ceremony. “This plant will play a key role in the automotive industry and specifically in the field of electric vehicles.”

Hyundai Motor sold a total of 605 Ioniq5s and Kona SUVs in Indonesia in 2021, accounting for 87 percent of the Indonesian EV market.

In July 2021, Hyundai Motor and LG Energy Solution established a 50-50 joint venture to build a battery factory in Karawang Regency, Indonesia, 65 kilometers (40.4 miles) southeast of the capital of Jakarta. It will have an annual production capacity of 10 gigawatt-hour or enough for approximately 150,000 EVs.

Construction is expected to finish in the first half of 2023, and operations should start in 2024. Its batteries will be sourced to Hyundai’s Bekasi plant.

BY SARAH CHEA [chea.sarah@joongang.co.kr]