South Korea's Hyundai, Grab Wants to Develop Electric Vehicles in Indonesia
Indonesia Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan. Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – The government continues to open investment taps for foreign companies that want to invest in Indonesia. One of them is by establishing business partners with Hyundai Motor Corp., a South Korean motorized vehicle company.

Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan said today (02/20), Hyundai want to immediately invest in Indonesia with a value around US$269 million. Beside Hyundai, he added, there were also Grab also wanted to invest in Indonesia.

The former Minister of Politics, Law and Security stated that Hyundai and Grab looking business partnership for the projects in the field of electric cars. But Grab’ investment is not yet certain because it is still in the discussion stage with its CEO Grab Anthony Tan, he said.

Hyundai itself at the end of 2018 was known to begin exploring negotiations with the government regarding the possibility of establishing an electric vehicle factory in the country. The progressive step is part of the company’ investment worth $880 million.

Hyundai chosen Indonesia as the location of the electric vehicle factory because the nation has a large reserves of laterlit nickel ore. The availability of these raw materials is so important because it is needed for the process of producing lithium-ion batteries as the main power source of electric cars in the future.

It’s estimated, with this investment, Hyundai will build an assembly plant with a production capacity of 250,000 units per year, including for electric vehicles. Hyundai has been active 15 years in Indonesia through PT Hyundai Mobil Indonesia Motor since 1995.

In 1997, the car maker established a joint venture company under the name PT Bimantara Hyundai Indonesia. The unit make Hyundai products in Indonesia with right hand drive (right hand drive) which are exported to the Asia Pacific region.

Besides Hyundai, other large Korean companies that have invested in Indonesia includes PT Hankook Tire Indonesia, PT Indo Lotte Makmur and PT Samsung Electronics Indonesia.

It was reported that the trade value of the two countries (Indonesia-Korea) in 2017 had reached $16.31 billion, an increase compared to 2016 of $ 13.68 billion. The value of Korean investment in Indonesia also increased from $ 1.06 billion in 2016 to $ 2.2 billion in 2017.

South Korea itself is Indonesia’ seventh largest trading partner with a fairly balanced trade balance, Korea is also ranked fifth as the biggest investor in 2017 with 3,274 projects worth US $ 2.2 billion.

Therefore, to accelerate the flow of investment, Hyundai requested that Indonesia must eliminate obstacles such as licensing and land acquisition issues. Licensing and land acquisition is still a problem in Indonesia and if it continues to be left it will make investors’ interest go down.

Written by Daniel Deha, Email: daniel@theinsiderstories.com