JARKATAIndonesia – Hyundai Motor Co. has built its brand image as a premium carmaker in Indonesia and controls the electric vehicle market as a major player. But it lags far behind its Japanese rivals in the internal combustion engine vehicle market.
The South Korean automaker is now preparing to penetrate deeper into the Southeast Asian market with the launch of the Kona electric SUV, an affordable electric vehicle produced there.
Raynaldi Setiawan, manager of Hyundai Mampang, a dealership in South Jakarta, said his customers were waiting for the launch of the electric variant of the small SUV, adding: “Hyundai Motor is becoming a new choice for consumers in the Indonesian market dominated by Japanese cars.”
Kim Moon-koo, production manager at PT Hyundai Motor Manufacturing Indonesia (HMMI), said the Kona Electric, its first electric vehicle model equipped with Indonesian-made batteries, will be offered at a relatively low and competitive price of around 500 million rupiah ($31,000).
In comparison, the mid-size electric crossover IONIQ 5 is priced at Rp 782 million. The IONIQ 5 is the first foreign model produced locally in the country and equipped with SK On Co. batteries. SK On is a South Korean battery manufacturer.
At HMMI’s Cikarang plant in West Java, assembly workers in black work clothes were busy inserting batteries produced by Indonesia’s HLI Green Power into Kona Electric for pilot production.
This is Hyundai’s first plant with complete production lines in the ASEAN region. Built on a 777,000 m² plot of land, it was put into operation in March 2022.
HLI Green Power is an Indonesia-based battery cell joint venture between Hyundai Motor Group and LG Energy Solution Ltd.
Hyundai is the largest seller of electric vehicles in Indonesia, holding 43.8% of the market with sales of 7,475 units last year.
However, in terms of total vehicle sales, it ranked fifth in the country last year, behind Toyota, Honda, Suzuki and Mitsubishi last year.
In 2023, Hyundai sold 35,500 units of vehicles in the Southeast Asian country.
COMPETITION FROM CHINESE ELECTRIC VEHICLE MANUFACTURERS
In the electric vehicle market, it faces the challenge of newcomers from China.
“Competition in Indonesia’s electric vehicle market has been intensifying with the entry of Chinese automakers such as Chery Automobiles and BYD Co.,” Kim said.
At an electric vehicle exhibition in Indonesia last month, BYD announced plans to build an auto assembly plant on about 100 hectares of land in the Subang Smartpolitan industrial zone in West Java, larger than Hyundai’s plant in the province, Xinhua News reported.
According to the media, the groundbreaking ceremony will take place in July and the plant is expected to begin operating in 2026.
HMMI employs around 2,000 people. It produces the Stargazer multi-purpose vehicle, the Creta compact crossover, the Santa Fe mid-size SUV and the IONIQ 5 fully electric mid-size crossover at the Cikarang plant which has an annual production capacity of 150,000 units.
The plant’s operating rate more than doubled to 110.9 percent in the first quarter of this year, compared with the previous year. This is the highest operating rate ever recorded thanks to strong local demand and shipments to neighboring countries.
HMMI sold a total of 192,792 units in the first five months of this year.
MANUFACTURING CENTER
The company plans to double the plant’s production capacity to make it a major manufacturing base in Southeast Asia.
It shipped 22,880 units to countries in the Association of Southeast Asian Nations (ASEAN), the Middle East and Africa since the beginning of this year through May, a 20.5 percent increase over the same period last year.
Hyundai is betting on the ASEAN region, a blue ocean for automakers, with a population of 671.7 million in 2022. The region’s population is expected to exceed 800 million in 2050.
Last month, Chung Euisun, chairman of Hyundai Motor Group that includes Kia Corp., discussed cooperation on hydrogen cars and electric vehicles with Indonesia’s coordinating minister for economic affairs, Airlangga Hartarto, in Seoul.
Write to Jung-Eun Shin at newyearis@hankyung.com
Yeonhee Kim edited this article
