In the last couple of years, carmakers have shifted their focus to our part of the world: South East Asia.

The reason is that while a lot of major markets around the world are stagnating or even declining, the markets in SEA have been proving that they're worthwhile of the attention and focus.

That is probably why the Hyundai Motor Company has officially announced that they are setting up a full manufacturing plant in Indonesia to serve the markets of ASEAN after having signed a Memorandum of Understanding with the Indonesian government. And given the benefits of being in the ASEAN Free Trade Area (AFTA), that means they can serve the region with vehicles with potentially better pricing and regionalization.

Hyundai to build new factory, develop new models for South East Asia image

"The establishment of Hyundai Motor’s manufacturing plant in Indonesia has been made possible thanks to the continuous cooperation and support from the Indonesian government," said Euisun Chung, Executive Vice Chairman of the Group. "Hyundai will continue to listen actively and respond to the Indonesian government's expectations and policies regarding eco-friendly vehicles, while continuously contributing to the ASEAN community."

The MOU ceremony was held at Hyundai's factory in South Korea with senior Indonesian government officials, including Indonesian President Jojo Widodo.

Hyundai to build new factory, develop new models for South East Asia image

The planned factory in Indonesia will be state of the art, and will occupy a 77.6 hectare site in Kota Deltamas on the outskirts of Jakarta. Hyundai says they will invest a total of about USD 1.55 billion; a bill that includes costs of developing new models for the region.

Hyundai says they intend on making new South East Asian market models with a new compact SUV, a new compact MPV, as well as new sedan models at the factory. It will have an annual capacity of 150,000 units per year when it opens in 2021, and will eventually have a full capacity of 250,000.

Moreover, the Hyundai Motor Group is looking at ways to produce ASEAN-specific electric vehicles (EV) at the plant, given the global auto industry's drive for greater electrification. Hyundai, together with Kia, plan to be the world's third largest manufacturer of EVs by 2025.

Once set up, vehicles built at Hyundai's factory will be eligible for AFTA benefits and be in direct competition to models produced in Thailand by carmakers such as Toyota, Mitsubishi, Honda, Ford, and more. More importantly, Hyundai's intention to build a new compact MPV means they could be directly competing against models like the Indonesian-made Avanza and Xpander.

The announcement, however, didn't specifically mention when or if they'll be exporting to the Philippine market.