The South Korean Hyundai Motor Group plans a record investment of 24.3 trillion won ($16.7 billion) in its home market amid growing geopolitical and economic uncertainties. The world's third-largest car manufacturer after Toyota and Volkswagen aims to accelerate its transformation towards electric vehicles (EV) and withstand increasing competition.
Of the total amount, 11.5 trillion won is allocated for research and development, particularly in the areas of electrification and connected vehicles. An additional 12 trillion won will be invested in modernizing EV production facilities, while the remainder will benefit the development of autonomous driving technologies, the company announced on Thursday.
The largest investment in South Korean history by the Hyundai Motor Group underscores the importance of continuous and stable investments to overcome current crises and secure future growth areas," the company stated.
The announcement briefly increased Hyundai and Kia's stocks by 1 percent and 3.7 percent, respectively, before they ended the trading day mixed.
Hyundai's Chairman Euisun Chung warned last week of increasing external risks, particularly in light of impending 10% import tariffs under US President Donald Trump. Domestically, political turbulence following the impeachment of President Yoon Suk Yeol is exacerbating uncertainties and dampening consumer demand.
Hyundai nevertheless plans to increase global sales by 2 percent to 7.4 million vehicles by 2025. "The competition from more cost-effective Chinese manufacturers will pose a major challenge in Europe and emerging markets," said Lee Hang-koo from the Jeonbuk Institute of Automotive Convergence Technology.
In the US, Hyundai's most important market, the company has already opened a plant in Georgia that produces the flagship model Ioniq EV. Meanwhile, the future of US tax credits for EVs under the Inflation Reduction Act (IRA) remains uncertain as Trump threatens their abolition.
To further expand market share, Hyundai relied on online sales. On Thursday, the company became the first automaker to offer vehicles through Amazon. By 2030, online sales are expected to account for up to 30 percent of total US sales.
