Hyundai Motor Co., South Korea`s largest carmaker, announced that it has signed a contract with Artha Graha (AG) to set up a joint venture to assemble commercial vehicles in Indonesia for local sales. A signing ceremony was held at the Indonesian Embassy in Seoul on Tuesday.

AG founded in 1973 is among the top 10 business conglomerates in Indonesia and has been responsible for local distribution of Hyundai’s commercial vehicles.

Under the contract, the joint company will begin operations in May of next year, and will be in charge of production, sales and after sales services.

The joint venture will produce 2,000 heavy-duty Xicent and medium-duty New Mighty trucks annually from late next year, with a plan to gradually add new models, according to Hyundai. The commercial vehicle market in Indonesia is now dominated by Japanese car makers which have run local assembly plants since the 1970s.

Hyundai Motor expects shipment of its commercial vehicles assembled in Indonesia to neighboring Southeast Asian countries, as they do not impose import tariffs under their bilateral trade agreements.

By Lee Seung-hoon and Minu Kim

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