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.