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Is Hyundai Motor investing RM2 billion to build new factory in Kulim?

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Is Hyundai Motor investing RM2 billion to build new factory in Kulim?

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Is Hyundai Motor investing RM2 billion to build new factory in Kulim?


Hyundai Motor Company made its way to the headline yesterday after it was widely reported that the company will build a new factory in Kulim, Kedah. The facility would become the company’s first plant in Malaysia but as it turns out, the report was inaccurate.

The original report which was published by Bernama has since been pulled out although it is still available online through various publications that picked up the story. A new report by South Korean news agency Yonhap today has provided a more accurate picture of Hyundai Motor’s plan for Malaysia.

It is not an all-new factory

Aerial view of Inokom Kulim. [Image source: Sime Motors.]

In general, Hyundai Motor is planning to increase its production capacity in Malaysia. The move will involve an investment of around USD480 million (~RM2.14 billion) over the next five years.

As part of the move, Hyundai will be collaborating with Inokom to upgrade the latter’s assembly plant in Kulim, Kedah. The Korean automotive giant currently hold a 15% stake in Inokom.

New models to be assembled at Inokom Kulim soon

Inokom Kulim - Body Shop
The body shop at Inokom’s Kulim plant. [Image source: Inokom]

Under the new expansion, the plant will begin to assemble Staria and an unnamed MPV starting in mid-2025. As a reference, only one Hyundai model is being assembled in Inokom Kulim at the moment which is the previous generation Santa Fe FL that, despite its age, has just been released in Malaysia a few months ago.

Hyundai is also planning to assemble mid-to-large SUVs in the facility. With an initial production target of 20,000 units per year, vehicles assembled in Inokom Kulim are not only for the Malaysian market but are expected to be exported to other markets within Southeast Asia.

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Hyundai to support Malaysia’s EV ecosystem but how?

Hyundai Ioniq 5 N
Hyundai Ioniq 5 N.

Even though the report from South Korea did not mention anything specific about electric vehicles, it did say that Hyundai is still committed to supporting Malaysia’s EV ecosystem. The company is apparently already looking into battery production facilities in addition to charging infrastructure and EV sales.

Hyundai currently offers three EVs in Malaysia including Ioniq 5, Ioniq 6, and Ioniq 5 N. Its EV journey in our market began with the 1st generation Kona Electric back in 2021 but there are no signs that Hyundai will release the 2nd generation Kona Electric in Malaysia so far.

EV charger at Hyundai Ara Damansara.

Meanwhile, Malaysia is currently not part of Hyundai’s EV production activities within Southeast Asia. As a comparison, the company’s plant in Indonesia assembles Ioniq 5, Ioniq 5 N, and 2nd generation Kona Electric while the Hyundai Motor Group Innovation Center in Singapore worked on Ioniq 5, Ioniq 5 robotaxi, and Ioniq 6.

The Ioniq 5 for the Vietnamese market is also locally assembled. In addition to that, Hyundai has also established a battery cell factory in Indonesia through a collaboration with LG.

That being said, Minister of Investment, Trade and Industry, Tengku Zafrul Aziz claimed that Hyundai did include EVs in its future CKD plan at Inokom Kulim. Nevertheless, the exact level of commitment that Hyundai will provide for Malaysia’s EV ecosystem remains unclear for now.

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