Hyundai set to build $400m car plant in RI

Hyundai set to build $400m car plant in RI

SEOUL (AFP): South Korea's largest automaker, Hyundai Motor Co., said yesterday it would build a 400-million-dollar auto joint venture in Indonesia to strengthen its foray into the local market.

The new plant to be built jointly with a local conglomerate Bimantara Citra Group, will be capable of producing 50,000 mid- sized passenger cars annually from the first half of 1999, a Hyundai spokesman said.

The two partners recently signed a contract which calls for a 50 percent equity stake each in the project, he said.

"The new project comes in line with Indonesia's growing passenger car demand and the country's policy to increase the sales of locally-produced cars, rather than imports," spokesman Min Kyung-Hwan said.

A subsidiary of the Bimantara Citra Group is currently importing knock-down kits of Hyundai's compact Accent and Elantra models. In 1996, Hyundai's kit exports to the group totaled some 2,400 units, the spokesman said.

Hyundai predicted the Indonesian auto market would grow 20 percent annually to reach 675,000 units by 2000 from 384,449 in 1995.

Intensifying competition among foreign players, another South Korean firm, Kia Motors Corp. is also building a joint venture in Indonesia to turn out 120,000 automobiles a year from September, 1998.

Hyundai, aiming to boost its offshore production to 500,000 including knock-down imports by 2000 from the current 80,000, is now engaged in expansion projects in India, Malaysia and Taiwan.

The company has total annual production capacity of 1.65 million vehicles at home. Domestic output will be raised to 1.9 million by 2000, Hyundai said.