A Kona Electric production line in Hyundai Motor’s plant in West Java, Indonesia (Courtesy of Hyundai Motor)
JARKATA, Indonesia – Hyundai Motor Co. has built its brand image as a high-end carmaker in Indonesia and controls its electric vehicle market as the top player. But it lags far behind Japanese rivals in the cumbustion engine vehicle market there.
Now the South Korean carmaker is gearing up to penetrate deeper into the Southeast Asian market with the launch of Kona Electric SUV, an affordable EV produced there.
Raynaldi Setiawan, head of Hyundai Mampang, a dealership in south Jakarta, said that his clients are waiting for the roll out 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 head at PT Hyundai Motor Manufacturing Indonesia (HMMI), said the Kona Electric, its first EV model equipped with made-in-Indonesian batteries, will be offered at a relatively low, competitive price in the 500-million-rupiah ($31,000) range.
That compares with the price tag of the all-electric midsize crossover IONIQ 5 of 782 million rupiah. The IONIQ 5 is the first foreign model locally produced in the country and fitted with SK On Co.’s batteries. SK On is a South Korean battery maker.
Hyundai Motor’s plant in Cikarang, West Java, Indonesia (Courtesy of Hyundai Motor)
At the plant of HMMI in Cikarang, West Java, assembly workers in black work clothes were busy in inserting batteries produced by HLI Green Power in Indonesia into Kona Electric for pilot production.
It is Hyundai’s first plant with full production lines in the ASEAN region. Built on a 777,000-square-meter land, it came online in March 2022.
HLI Green Power is a battery cell joint venture based in Indonesia between Hyundai Motor Group and LG Energy Solution Ltd.
Hyundai is the largest EV seller in Indonesia, commanding 43.8% of the market with the sale of 7,475 units last year.
In terms of total vehicle sales, however, it ranked fifth in the country last year, trailing behind Toyota, Honda, Suzuki and Mitsubish last year.
In 2023, Hyundai sold 35,500 units of vehicles in the Southeast Asian country.
COMPETITION FROM CHINESE EV MAKERS
In the EV market, it is facing a challenge from newcomers from China.
“Competition in Indonesia’s EV market is intensifying after Chinese carmakers such as Chery Automobiles and BYD Co. landed,” said Kim.
During an EV exhibition held in Indonesia last month, BYD announced a plan to build an automotive assembly plant on around 100 hectares of land in the Subang Smartpolitan Industrial Area in West Java, bigger than Hyundai’s plant in the province, Xinhua News reported.
The groundbreaking will reportedly take place in July and it is expected to start operation in 2026, according to the news outlet.
IONIQ 5 in downtown Jakarta
HMMI employees around 2,000 workers. It churns out multi-purpose vehicle Stargazer, compact crossover Creta, mid-sized SUV Santa Fe and all-electric midsize crossover IONIQ 5 at the plant in Cikarang that has an annual production capacity of 150,000 units.
The plant’s operating rate more than doubled to 110.9% in the first quarter of this year, compared with the year prior. It marked its highest-ever operating rate thanks to robust local demand and shipments to neighboring countries.
HMMI has sold a total of 192,792 units in the first five months of this year.
MANUFACTURING HUB
It plans to double the production capacity at the factory to turn it into a major manufacturing base in Southeast Asia.
It shipped 22,880 units to countries of the Association of Southeast Asian Nations (ASEAN), the Middle East and Africa since the start of this year through May, up 20.5% from the same period of last year.
Hyundai bets on the ASEAN region, a blue ocean for carmakers, with a population of 671.7 million as of 2022. The region’s population is projected to top 800 million in 2050.
Last month, Chung Euisun, chairman of Hyundai Motor Group encompassing Kia Corp. discussed cooperation on hydrogen-fueled cars and EVs with Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto in Seoul.
By Jung-Eun Shin
newyearis@hankyung.com
Yeonhee Kim edited this article
