Hyundai Indonesia Aims to Boost Local Parts Output

Hyundai is aiming to have small and medium manufacturers increase production of spare parts for its Indonesian market.

This after the Indonesian government worked with Hyundai, the Indonesian Cooperatives and SMEs (small and medium enterprises) Ministry and the South Korean government to train SMEs to produce parts that are compatible with South Korean vehicle specifications.

Hyundai Indonesia President Director Mukiat Sutikno tells the Jakarta Post having more spare-parts makers will help Hyundai’s local arm negotiate with the parent company to launch new models for the Indonesian market.

“We have a lack of models in the dense market such as small multipurpose vehicles and…sport utility vehicles,” Mukiat says.

Hyundai Indonesia now imports cars from Hyundai’s South Korean plants because the automaker’s Chinese factory is producing large and luxury models and the Indian plant is building small and less-costly models that would be expensive to sell in Indonesia.

Indian-built cars have different specifications, especially engine capacity, Mukiat says.

“Their models are equipped with 1.7L and 1.8L engines,” he tells the Post. “In Indonesia a bigger engine of more than 1.5 L will be subject to an expensive import tax. Thus, it is difficult for us to import from the Indian plant.”