Jakarta. South Korean carmaker Hyundai Motor Company could produce up to 150,000 cars a year in Indonesia when its new factory operates at full capacity, an executive said on Friday.

The Indonesian plant will build a prototype in May. It also plans to build electric cars starting next year.

“The new factory is almost completed, with machinery installation already reaching 97 percent now,” Hyundai Asia Pacific COO Lee Kang Hyun said in an interview in Jakarta.

“By May 1, we will be producing a prototype and hopefully we can launch a new model for the Indonesian people by the end of the year,” he said.

Lee admitted that it may take several years before the factory can reach its full capacity.

Hyundai has earlier announced an investment of $1.5 billion in the new plant -- set to be its biggest in Southeast Asia -- in the West Java town of Karawang. Construction works for the new assembly plant have started since last year.

“The factory will have a capacity of 150,000 cars which we can sell to local market as well as export markets in Southeast Asia,” Lee said.

“Indonesia is the biggest country, also the most populous in Southeast Asia, and accordingly it has the biggest market potential.”

The decision to make Indonesia regional production hub came after a meeting between top Hyundai executives and President Joko “Jokowi” Widodo, Lee said.

In July 2019, Jokowi received Hyundai Motor Group delegation led by then executive vice chairman Chung Euisun --  now Hyundai chairman.

Four months later, the president visited Hyundai’s Ulsan car factory, one of the biggest automobile production sites in the world with a capacity of 1.5 million cars a year.

During his visit, President Jokowi wrote his signature on the hood of a Hyundai’s Kona electric car.

In addition to the new factory, Hyundai is making its presence felt through the establishment of its local arm, Hyundai Motor Indonesia, which deals with distribution, sales and services, Lee said.

“We plan to build electric cars here in Indonesia from next year,” he said.

Hyundai has delivered a small number of two EV models Ionik and Kona to Indonesia in the last two months, Lee said. 

Hyundai is now building reputation in the Indonesian market dominated by Japanese brands and will focus on expanding its market share when the new factory begins delivering output next year, he said.

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