Volkswagen and Renault are set to invest in local assembly in Indonesia this year, according to the country’s ministry of industry, reported by Kompas. There have been rumours on the European carmakers setting up shop in the republic, but the size of the investments are unknown at this point.
According to Indonesia’s director of maritime, transportation and defense equipment Putu Juli Ardika, the two carmakers will use existing facilities in the country, as opposed to building new factories from scratch. He added that Indonesia has car production capacity of 2.2 million units per annum, but current output is at 1.2 million per year.
The government official also said that besides VW and Renault, there are other carmakers ready to invest in local production, such as Hyundai. However, those “Asian brands” aren’t ready to officially announce their intentions yet.
Last month, Reuters reported that Hyundai is set to invest US$880 million (RM3.6 billion) in Indonesia, and has plans to produce electric vehicles (EVs) in the country, according to Indonesian deputy minister for industry Harjanto.
The official said that the planned factory will have an annual capacity of 250,000 units, including EVs. He added that the plan was to export 53% of the proposed plant’s output, mostly to ASEAN and Australia, with the remaining 47% for domestic consumption.
Hyundai – which along with Kia brand is the world’s number five automaker by sales – has not publicly commented on its plans for Indonesia, but said that it was “considering various ways to expand” in new markets including Southeast Asia. The company insisted that nothing had been decided regarding new production facilities in the region.