Hyundai Motor Company, which has been actively expanding into new global markets, including recently targeting the Indian market, is also actively targeting the ASEAN (Association of Southeast Asian Nations) market, using Indonesia, which has the highest overseas plant operating rate, as a bridgehead. Indonesia is a region that Hyundai Motor Group Chairman Chung Eui-sun has been investing in for several years, having already visited four times officially since taking office in 2020. Hyundai Motor Company plans to speed up localization by starting local production of electric vehicle batteries in Indonesia and establishing a value chain encompassing production to sales.
According to Hyundai Motor Company on the 1st, Hyundai Motor Company Indonesia Manufacturing (HMMI) recorded the highest figures among overseas factories excluding the Korean factory (114.9%), with a production capacity of 23,000 units, production performance of 22,520 units, and an operating rate of 110.9% in the first quarter of this year (January to March), its second year of operation.
As of the end of last month, the cumulative factory sales volume was 192,792 units. If this month’s figure is added, it is likely that the cumulative sales volume will exceed 200,000 units in the first half of the year. HMMI’s export volume from January to May also recorded 22,880 units, up 20.5% from the same period last year (18,984 units).
HMMI, which was completed in September 2022 in the Bekasi Deltamas Industrial Complex in Indonesia and has attracted attention as the Hyundai Motor Group's first automobile plant in the ASEAN region, is currently producing four models: the Creta, a strategic model specialized for the local market, the Stargazer multi-purpose vehicle (MPV), and the Santa Fe and Ioniq 5 mid-sized sports utility vehicles (SUVs).
In addition, Hyundai Motor Group completed construction of HLI Green Power, a local joint venture with LG Energy Solution, in Karawang last June and recently began mass production. Batteries produced by HLI Green Power will be installed in the new Kona Electric (EV). It is the first automaker to have established a local production and sales system from electric vehicle battery cells to finished vehicles among automakers that have advanced into the local market.
Through this, the company is building an electric vehicle ecosystem that extends from batteries to finished vehicles, reducing logistics costs and time, greatly improving production efficiency, and also creating the image of a “localized vehicle.”
The reason Hyundai is investing in Indonesia is because, as of last year, it had a population of 277.5 million, ranking fourth in the world after India, China, and the United States, and it is a key country in the ASEAN market. It is also the world’s largest nickel reserve country, and is rapidly emerging as a stronghold for the electric vehicle era. According to the ASEAN Automobile Federation, the ASEAN automobile market was tallied at 3,355,136 units last year, of which Indonesia accounted for 29.9%, the largest.
The ASEAN region is a representative blue ocean for the global automobile industry. According to the official ASEAN portal, the total population of ASEAN is 671.7 million as of 2022, and it is expected to exceed 800 million by 2050. In particular, with the average age of 30, the consumer market and the size of the working-age population are continuously growing, and the automobile support policies of each country are also strengthening, so it is evaluated as a market with high potential for additional growth. In the past, Japanese automobile manufacturers had an absolute advantage, but recently, as preferred models such as electric vehicles and MPVs have diversified, global automobile manufacturers are actively entering the market.
Hyundai Motor Company plans to foster the ASEAN Belt, which extends from Indonesia to Vietnam and Singapore, as a key global market. As part of this, it established a joint production venture (HTMV) with Vietnam's Thanh Cong Group in Ninh Binh Province, Vietnam in 2017, and completed HTMV's second plant in September 2022. In November last year, it also announced plans to build the Hyundai Motor Group Singapore Global Innovation Center (HMGICS), which will feature manufacturing facilities, research and development (R&D) spaces, and customer experience facilities in the Kowloon Innovation District in West Singapore, and utilize it as a key base for future mobility.
