mobanmarketSEOUL: South Korea’s Hyundai Motor has signed a deal to build a $1.5 billion car plant in Indonesia, the company said, its first in Southeast Asia, where Japanese carmakers dominate the market.
###
The deal comes as Seoul looks to diversify its trade-dependent economy, the world’s 11th largest, away from reliance on traditional partners China and the US.
###
Indonesia is the region’s largest automobile market, and the $1.55 billion deal aims to “combat slowing demand in the global automotive market” and propel future growth, Hyundai said in a statement.
###
The plant, to be built in Bekasi, east of Jakarta, will start production in 2021, Hyundai said, ultimately aiming to produce 250,000 vehicles a year.
###
South Korea’s 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.
###
Hyundai, the South’s largest automaker, said it was building the factory in Indonesia to avoid import tariffs ranging from five to 80 per cent in the ASEAN region.
###
At present it lags far behind its Japanese rivals in the region, with its sales reaching 122,883 vehicles versus Toyota’s 854,032 and Renault-Nissan-Mitsubishi’s 351,267 from January to September this year, according to research firm LMC Automotive.
###
South Korea’s central bank last month cut its key interest rate to its lowest in two years in an effort to prop up slowing growth with the economy hit by a bitter trade spat with Japan.
###
Hyundai shares were up 1.22 per cent in Wednesday afternoon trading in Seoul.
###