Hyundai to produce trucks and buses in Indonesia

Jakarta (ANTARA News) - South Korean automotive giant Hyundai will start producing trucks and buses in Indonesia as of March this year with an investment of US$23 million.

"Hyundai is growing confident it will produce trucks and buses in Indonesia after the government decided to stop importing used cars starting this year," the director general of transport industry and telemathics of the ministry of industry, Budi Darmadi, said here on Friday.

He said Hyundai in cooperation with Korindo Group would set up PT Kostramas Jaya in the building of trucks of above 8.5 Gross Vehicle Weight and large buses.

The new plant which will be built in Balaraja, Tangerang, Banten, West Java, will have a capacity of producing around 300 buses and 200 trucks a month.

He said the US23 million investment would only be for building the plant and providing production facilities. "It excludes funds for land procurement, because the land would be provided by Korindo," he said.

He said Hyundai has a highly prospective market in Indonesia for its trucks and buses following the government`s decision to stop the import of used cars, and in view of the country`s high economic growth rate.

"We hope besides trucks and buses Hyundai would also produce passengers cars in Indonesia," he said.

So far the cars produced by Hyundai in Indonesia included Atoz, Accent and Trajet cars. He hoped Hyundai would increase its investment in Indonesia following an increase in market share for smaller cars.

"We continued contacting Hyundai suggesting them to raise their investment in Indonesia," he said.

In November last year, the Indonesian minister of industry visited South Korea to discuss investment in passenger car production.

Budi said he was optimistic that the automotive market in Indonesia would further develop. He also believed demands for cars would reach 400,000 units this year after dropping last year to around 300,000 only.

"We are optimistic sales would reach 500,000 units by the end of 2008 like in 2005," he said.