Concerns are rising over Hyundai Motor’s Indonesia plant, a key ASEAN hub the automaker has been nurturing. The facility’s operating rate has nearly halved compared to last year, raising worries about disruptions in its local electrification strategy.
According to Hyundai on the 24th, the operating rate at its Indonesian manufacturing plant (HMMI) in the first quarter (January–March) was 56%. This marks a sharp 54.9 percentage point drop from the same period last year (110.9%). Over the same period, production volume also fell by 19.4%, from 22,520 units to 18,150 units.
HMMI is a strategic base for Hyundai Motor Group’s push into the ASEAN market. Completed in March 2022 as Hyundai’s first finished-car plant in ASEAN, the facility spans approximately 8.36 million square feet in the Delta Mas industrial complex in Bekasi, Indonesia. Hyundai plans to invest a total of $1.55 billion in the site by 2030.
The sudden decline in the operating rate is attributed to multiple factors, including global supply chain instability, shrinking domestic demand in Indonesia, and early-stage challenges in its electrification strategy. Despite using locally sourced batteries for vehicles produced at HMMI as part of its EV transition, sales growth has remained sluggish.
As a result, Hyundai is even considering halting production of the IONIQ 5, its brand-dedicated EV model manufactured in Indonesia. This comes as HMMI’s local EV sales have plummeted amid aggressive competition from Chinese brands.
Moving forward, Hyundai aims to accelerate its electrification shift while boosting production efficiency in line with recovering demand in the ASEAN market. The company plans to focus on multi-purpose vehicles (MPVs) and compact SUVs—popular segments in ASEAN—to strengthen model diversity and localization strategies.
A Hyundai official said, “We plan to solidify our image as a leading EV brand with the Kona Electric while aggressively targeting the ASEAN market through specialized vehicles and tailored sales strategies.”
Meanwhile, HMMI currently produces four models: the compact SUV Creta, the MPV Stargazer, the midsize SUV Santa Fe, and the EV IONIQ 5—all tailored for the local market.
