Hyundai Motor said it signed a preliminary agreement on Tuesday in Indonesia to build a new factory.

Dec 02 2019 / By Shreyas Tanna

The deal is that Hyundai and Kia Motors affiliate are battling a protracted sales decline in China, where they are closing this year two factories.

Also, the government of Seoul on Tuesday approved Hyundai's long-delayed construction in the rich district of Gangnam, which is set to be the highest South Korean skyscraper by 2026.

More than 4 years ago, the second-largest company in Korea, Hyundai Motor Group, offered to buy the Company more than triple its market price with $10 billion in 2014, vying for Samsung Electronics and springing up a stock sale.

The plant will begin production at the end of 2021 in the town of Bekasi, East Jakarta, with an annual capacity of 150,000 vehicles and estimates for an expansion of 250,000 vehicles per year, Hyundai said. Hyundai said. Hyundai plans to produce small utility vehicles and multifunctional vehicles, while electrically tailored vehicles are being considered for the South-east Asian market.

The agreement was signed at an event in which Indonesian President Joko Widodo and Vice-President Euisun Chung were present. The agreement was signed. Widodo is here in South Korea, where South Korean President Moon Jae-in will meet with ASEAN leaders.

According to the research firm LMC Automotive, Hyundai is far behind Japanese competitors in Southeast Asia with sales of 122.883 cars compared with 854.032 in Toyota from January to September of this year.

Hyundai reported that the combined vehicle sales are expected to grow to 4,49 million units by 2026, compared to 3,16 million in 2017, among key ASEAN countries including Indonesia, Thailand, Malaysia, Vietnam, and Singapore.

In part because of security concerns raised by the Air Force of South Korea, which said it would interfere with radar and military operations, the construction of the new headquarters was delayed, originally due to begin in 2016, a Seoul city official said in his statement.

The official stated that it could be suspended if Hyundai did not do this, but Hyundai had signed an agreement with the Defense Ministry that operational limitations could be settled until building construction reached approximately 260 meters.

In March, Hyundai Motor said that, following a request by US hedge fund Elliott Management to discontinue the contentious venture, it was in talks with potential investors to share additional costs of approximately 3.7 trillion won ($3.1 trillion).