Just over two years after it was announced, the Hyundai Motor Manufacturing Indonesia (HMMI) plant has officially opened in the archipelago. Located some 40 km east of Jakarta in the Deltamas industrial complex near Cikarang, the facility is the South Korean carmaker’s first full-scale factory in Southeast Asia; more importantly, it is also capable of building battery electric vehicles.

Completed in December, HMMI will be manufacturing the facelifted Creta and the Ioniq 5 – the latter having only recently been launched in Malaysia. The plant has an initial annual capacity of 150,000 vehicles, with previous reports saying that around half of that output is earmarked for exports. Hyundai plans to invest US$1.55 billion (RM6.5 billion) in the factory, which will eventually be able to build 250,000 vehicles a year. Eco-friendly technologies include solar panels and the planned use of water-based paints.

Hyundai says the HMMI plant underlines its commitment to electric cars in the country, with the Ioniq 5 becoming the firm’s first dedicated EV to be built in ASEAN. The company is also building a battery cell factory in nearby Karawang together with LG Energy Solutions, which is expected to be completed in the first half of next year before being operational in 2024.

Hyundai is already a heavy hitter in the Indonesian EV segment, with the Ioniq Electric and Kona Electric accounting for 87.3% of all electric car sales in the country in 2021. Aside from the Creta and Ioniq 5, HMMI will also start building the Santa Fe in the first half of this year, along with a small MPV specific for the ASEAN market in the second half.

Contrary to what you might think, the opening of the Indonesian plant could mean more local assembly in Malaysia, not less. As we’ve previously reported, HMMI will be building completely knocked down (CKD) kits for the region, helping markets take advantage of local incentives.

Currently, Hyundai-Sime Darby Motors imports their CKD kits from Korea, which incurs tariffs of between five and 80%. Indonesian kits will sidestep this because of the ASEAN Free Trade Agreement (AFTA). New CKD SUVs are expected to arrive in Malaysia this year – the facelifted Santa Fe, perhaps?