Hyundai Motor Group is going to invest about $74 billion into the company during the next four years.
In an effort to expand its line-up and add much-needed production capacity, Hyundai Motor Group plans to invest almost $74 billion over the next four years.
The move was announced barely a week after Chung Moon-koo, the chairman of the group that controls both Hyundai and Seoul-based affiliate Kia, forecast the group will see its slowest growth in a decade as it deals with increased competition and a weaker global economy. Hyundai officials have also said that once-booming growth has been restricted by limited production capacity in key markets including North America.
At 81 trillion Korean won, the spending plan by the world’s fifth-largest automaker works out to a 35% annual increase for each of the four years compared with 2014’s previous record investment level of 14.9 trillion won.
Hyundai and Kia have been rapidly expanding their individual product line-ups in recent years, notably adding a range of new luxury models, along with their traditional low- and mid-range value lines. Hyundai has also made a push into more environmentally friendly vehicles, launching a hydrogen fuel-cell version of the Tucson SUV last year. Both a hybrid and a plug-in hybrid version of the Sonata sedan will be introduced at next week’s North American International Auto Show in Detroit.
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The new, four-year spending plan will include $28.7 billion to develop low-emission vehicles, as well as Internet-connected “smart cars” and other advanced technologies.
“By investing such a record amount, we are planning to focus on securing core technologies in environmentally-friendly cars, smart cars and other next-generation cars,” Hyundai said in a statement.
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The move will require the hiring of at least 7,000 new engineers.
The company also plans to set up a number of new plants. The Kia side last year announced it would erect an assembly plant in Mexico and will now boost the capacity of a Chinese factory. The Hyundai group will add two other plants in China as part of the increased spending plan.
And despite the country’s current economic and political problems, the Hyundai group will add new production operations in Russia.
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One of the more controversial moves will see the group build a new $10 billion complex in Seoul’s trendy Gangnam district. It will include not only the company’s new headquarters, but also hotels, a shopping mall and an auto-themed exhibition center.
Hyundai plans to sell 8.2 million vehicles worldwide this year. That would be a 2.5% increase over 2014 – but would still mark the slowest growth the company has recorded in over a decade.