Hyundai Motor Company will realize an investment in Indonesia around US$2.83 billion - Photo: Privacy

JAKARTA (TheInsiderStories) – The Korean automotive company, Hyundai Motor Company (HMC) will realize an investment in Indonesia around US$2.83 billion (Rp40 trillion). It was stated by Minister of Industry Airlangga Hartarto when meeting with Hyundai in Seoul, South Korea on Tuesday (6/25).

Hartarto said that the investment will be used to support Hyundai’s production in Indonesia in 2021, which is estimated to reach 7 thousand to 250 thousand units per year. The types of vehicles that will be produced are SUVs, MPVs, hatchbacks, and sedans.

The target is as much as 47 percent of production for the domestic market and 53 percent for export, “Hartarto said in his official statement on Sunday (6/30).

The Hyundai factory in Indonesia whose location is still unconfirmed will be able to absorb a workforce of 3,500 people. Indonesia will become its production base to meet the needs of the domestic and export markets.

He stressed that the government fully supports the new investment plan with fiscal facilities. The Hyundai plans to develop hydrogen-powered cars called Hyundai Nexo. “The Indonesian government will encourage investment in the electric vehicle industry by providing tax holiday facilities,” he said.

Meanwhile, the Ministry of Industry’s Director General of Metals, Machinery, Transportation Equipment and Electronics Harjanto previously said, Hyundai had revealed plans to build factories in the southeast Asian region since the beginning of January 2018. From several southeast Asian countries, Indonesia was chosen as the location of the factory construction.

“Moreover, Indonesia has nickel raw material which can be used for the production of lithium-ion batteries as an important component of electric vehicles,” he said.

Harjanto explained, of the total production capacity of HMC in Indonesia, some will be used for making electric vehicles. Of that capacity, most of it is to fill the export market to Southeast Asia and Australia, and the rest to meet domestic needs.

Meanwhile, Minister of Trade, Industry, and Energy (MoTIE) of South Korea Sung Yun Mo added that strengthening cooperation between Indonesia and South Korea covered many industrial sectors. Not only the steel and chemical industry sector but also will target the automotive industry sector.

“This investment can deepen the manufacturing structure and improve industrial competitiveness in Indonesia,” he said.

The cooperation also opens opportunities for component suppliers, with a large number of vehicle component requirements, which can also strengthen small-medium industries in Indonesia.

“This cooperation is very meaningful because it will increase competitiveness, and contribute to a healthier industrial ecosystem,” he said.

US$1: Rp14,200

Written by Staff Editor, Email: theinsiderstories@gmail.com