Hyundai’s Indonesian Plant Is A Showcase Of Its Commitment To ASEAN

Hyundai Motor Philippines (HMPH) has brought in a roster of media to a trip to Jakarta to witness the global reveal of the Stargazer X, but more than that, the South Korean automaker used this opportunity to give us a tour of its sophisticated Indonesian plant. For most of history, Hyundai’s offerings in the region are assembled in its home country of South Korea, but by establishing a manufacturing hub in the region, Hyundai’s Indonesian plant serves as an affirmation of its commitment to the ASEAN region.

It’s More Than Just Another Factory

Situated at Cikarang, 40 kilometers away from Jakarta, Hyundai Motor Manufacturing Indonesia (HMMI) is Hyundai Motor Company’s (HMC) wholly-owned subsidiary, therefore making the brand’s first factory in Southeast Asia. It is not their first production line in the region though, since they currently have contract assemblers in Vietnam (Thanh Cong Manufacturing) and Malaysia (Inokom), with most of these destined for sale in their respective markets only.

Hyundai’s Indonesian plant is situated on a massive 77.6-hectare land where 18 hectares is the size of the factory itself. It’s a US$1.55 billion investment that has a production capacity of 150,000 but with room to expand to 250,000 units annually. The Stargazer and the recently-launched Stargazer X are produced here, along with the Creta. Complete knockdown kit (CKD) assembly on the other hand, also exists in HMMI in the form of the Santa Fe and Ioniq 5. While it produces cars mainly for Indonesia and the rest of the ASEAN region, the Creta is exported to South America as well.

But this is where Hyundai’s Indonesian plant sets itself apart from other manufacturing facilities in the region. First and foremost, HMMI is one of the few automotive factories in ASEAN and the only one in Indonesia to be fully airconditioned. Along with the highly-automated systems in place, the manufacturing plant is designed around the brand’s “Progress For Humanity” mantra. HMMI is a plant that puts people at the forefront thanks to a climate-controlled environment as well as using wearable robotics to support the mobility of factory workers. These wearable robotics don’t use batteries, mind you, and these help employees in lifting heavy objects or reduce muscle fatigue in assembly lines that require bending your joints for long periods of time.

HMMI’s human-centered approach to its employees doesn’t just end at the production line. That’s because there is a heavy emphasis not just on the usual safety aspect, but also in terms of physical and mental health. There’s a clinic and even a psychological center to look after the well-being of employees. The religious and gastronomical needs of the employees are also met with the integrated mosque inside the plant along with a halal-certified canteen. Indonesia, after all, has the world’s biggest Muslim population.

Part of its human-centered approach is the use of 100 percent renewable energy that’s been achieved through its solar panels that produce 3.2 megawatts (MW) of energy. The solar panels contribute to 5 percent of HMMI’s energy consumption. Does that mean the remaining 95 percent is from fossil fuel sources? Not quite. Just recently, HMMI is now sourcing the rest of its energy needs from the PLN Kamojang Geothermal Power Plant, which is located in Bandung, West Java.

Hyundai Is More Than Just An Automaker

But there’s another thing I noticed while roaming around Hyundai’s Indonesian plant. As mentioned, HMMI is highly-automated and robotic, which means that the majority of the stamping to the welding and final assembly has a high degree of automation. What you will notice is that, unlike most automakers who outsource their equipment, Hyundai uses its own robots. Not only that but a lot of Hyundai’s vehicle components aren’t sourced from third-party suppliers, either.

To understand, you have to look at Hyundai as a whole. Hyundai Motor Company actually has a parent company called Hyundai Motor Group (HMG) and this is where things get interesting. HMG isn’t just involved in the manufacturing of the vehicles and its own vehicle components (which is already a rarity in the industry), but the conglomerate also covers shipping, logistics, construction, and robotics. HMG, as it stands, is very much a vertically-integrated company, which means its production costs are as competitive as they could be. Additionally, by having a supply chain that it could call its own, including the logistics aspect, HMG could maintain a high standard of quality from raw materials to the actual finished product.

Those giant stamping robots you see? That’s made by Hyundai Rotem, which also makes trains and defense equipment. Your Hyundai and Kia (because Kia is part of HMG) were shipped to the Philippines by HMG’s shipping and logistics division, Hyundai Glovis, using some of the world’s biggest ships made by none other than HD Hyundai–a related but different company from HMG involved in heavy-duty industries. HD Hyundai also has a heavy-duty robotics division, and they’re also responsible for the automation and the robots used in HMMI’s production lines. Even the steel in a Hyundai’s body is made by Hyundai Steel, whereas Japanese automakers would outsource its steel from a third-party company like Nippon Steel.

Oh, and the transmissions, seats, electronics, infotainment systems, engine control unit (ECU), advanced driver-assistance systems (ADAS) sensors, suspension, and chassis components aren’t outsourced, either. These are made by Hyundai Mobis, Hyundai TRANSYS, Hyundai KEFICO, or Hyundai WIA. Insane, right?

Hyundai Wants To Gain A Foothold In ASEAN

With control of everything from suppliers to manufacturing, robotics, and shipping, Hyundai has the capability to meticulously create products that are of the highest quality standards. But as you’ll probably notice up to this point, Hyundai has been lacking any vehicles that are mainly catered to the ASEAN region. Prior to the arrival of cars like the Creta, Stargazer, and Stargazer X, Hyundai has a full lineup of global models, which is all well and good, but these are mostly centered around the tastes of South Korean and Western markets. It was only when Hyundai decided to establish a regional hub in Indonesia that it started to offer regionalized vehicles in ASEAN and thus, affirm its commitment to the region.

You see, for the longest time, Japanese automakers have long been the masters of regionalized cars. Toyota has cars like the Avanza, Vios, and Innova, while Mitsubishi has the Xpander and Montero Sport. Now, with Hyundai building a massive plant as well as a research and development center in the region, they are taking the ASEAN region seriously by developing vehicles like the Creta and Stargazer–vehicles that perfectly fit the needs and budgets of the region.

In addition to that, HMMI is also building a battery cell plant together with LG Energy Solutions within their land area, which will also help Indonesia achieve its goal of converting its 130,000 government vehicles to electric vehicles (EVs). Currently, the Ioniq 5 is a CKD production vehicle, but with the battery cell plant already under construction, this would mean that its batteries will eventually be locally manufactured as well, thus making this the first of its kind in Southeast Asia. The CKD assembly of the Ioniq 5 already helps in making the electric crossover SUV competitively priced in Indonesia, and locally producing the battery would further drive the cost down.

All of these are signs of HMMI further increasing its presence and commitment to the ASEAN region. By developing models that meet the needs of ASEAN customers, as well as creating a manufacturing environment that’s human-centric and forward-thinking, Hyundai is setting a benchmark in how it operates as a company to create competitive vehicles for its customers as well as a workplace that gives the people behind the Hyundais we drive a place to call their “second home”.