The automaker has chosen Indonesia for various reasons

Hyundai has been on a spending spree lately. Recently, the South Korean automaker invested about $250 million in a ride-hailing company, and now, according to a report from Reuters, it is investing $880 million in a plant in Indonesia where it plans to start building electric vehicles.

Why is Hyundai Expanding into Indonesia?

Hyundai is Expanding into New Territory and Has Chosen to Build a New Plant in an Unexpected Location
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Even though Hyundai is doing well all across the globe, it has not been able to crack into Southeast Asia. This will be the automaker’s first factory there, and setting up a plant in Indonesia is a wise move as this helps Hyundai cut its reliance on China, where sales have taken a major hit due to the diplomatic tensions between the two countries.

It sold just 1,372 examples out of its entire linup in ten months this year - that's practically nothing compared to Toyota which sold over 460,000 units in the same period.

Also, Hyundai chose Indonesia to build electric vehicles because the country has large reserves of nickel laterite ore, a key ingredient needed for the production of lithium-ion batteries.

Statistically Speaking

Hyundai is Expanding into New Territory and Has Chosen to Build a New Plant in an Unexpected Location
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According to Airlangga Hartarto, Indonesia’s Deputy Minister for Industry, the Hyundai plant will have an annual production capacity of about 250,000 vehicles, including electric vehicles.

Hartarto also revealed that current plans call for 47-percent of the vehicles manufactured to be sold in the local market, while the remaining 53-percent will be exported globally, mainly catering to Southeast Asia and Australia.

The $880 million investment announcement comes shortly after Hyundai made a huge $250 million investment in a popular local ride-hailing company called Grab.

Our Take

Hyundai is Expanding into New Territory and Has Chosen to Build a New Plant in an Unexpected Location
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Hyundai, as an automaker, produces one of the most refined and clean combustion engines available today and will certainly be one of the last survivors. We don’t get to hear much about the South Korean and its diversifications. Other than EVs, Hyundai is also diversifying into ride-hailing services like many other automakers, and it looks like the company is finally getting aggressive with its future plans before it gets too late. However, Hyundai is still nowhere to be seen in the autonomous scene. Do you think Hyundai does not believe that autonomous technology is the future, or is it being too complacent about it? Let us know your thoughts in the comments section below.

Further reading

2019 Hyundai Kona Electric
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Read our full review on the 2019 Hyundai Kona Electric.

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