South Korea’s Hyundai Motor Co has signed a deal to build a US$1.55 billion auto plant in Indonesia, the company said, its first in southeast Asia, where Japanese automakers dominate the market.
The deal came as Seoul looks to diversify its trade-dependent economy, the world’s 11th-largest, away from its reliance on traditional partners China and the US.
Indonesia is the region’s largest auto market, and the deal aims to “combat slowing demand in the global automotive market” and propel growth, Hyundai said in a statement.
Photo: AP
The plant, to be built in Bekasi, east of Jakarta, would start production in 2021, Hyundai said, ultimately aiming to produce 250,000 vehicles a year.
South Korean President Moon Jae-in has been pushing a “New Southern Policy,” seeking to bolster economic ties with Southeast Asia as the country aims to reduce over-reliance on Beijing and Washington, and Hyundai’s announcement coincided with a South Korea-ASEAN summit in Busan, South Korea.
Hyundai, South Korea’s largest automaker, said it was building the factory in Indonesia to avoid import tariffs ranging from 5 to 80 percent in the ASEAN region.
At present it lags far behind its Japanese rivals in the region, with sales reaching 122,883 vehicles versus Toyota Motor Corp’s 854,032 and the Renault-Nissan-Mitsubishi alliance’s 351,267 from January to September this year, research firm LMC Automotive has said.
Separately, Tesla Inc has received 250,000 orders for its electric pickup truck unveiled five days ago, chief executive officer Elon Musk suggested in a Tweet on Tuesday.
After more than 50 interactions on Twitter since the launch, Musk tweeted “250k” on Tuesday night in an apparent reference to the number of orders.
The company did not immediately confirm the figure after regular market hours.
Tesla opened preorders immediately after the unveiling and allowed potential buyers to book the truck by depositing a fully refundable US$100, compared with the US$1,000 it charged for booking Model 3 sedans in 2016.
Not all orders translate into sales, as many are likely eventually to be canceled and money refunded to depositors. Tesla plans to start manufacturing the truck in late 2021.
Additional reporting by Reuters
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