Hyundai Motor Group Chairman Chung Mong-koo
Hyundai Motor Group will invest 14.1 trillion won this year into the group, up 15.6 percent from 12.2 trillion won last year, the group said recently. The huge increase in investments reflects Chairman Chung Mong-koo's idea that investment should be increased amid crises.
The group said 11.6 trillion won will go to domestic auto production facilities to help boost the growth of the national economy this year, up 27.5 percent from last year. About 5.1 trillion won will go R&D activities this year, up 10.9 percent YoY, while 9 trillion won will go to auto production facilities this year, up 18.4 percent YoY, the group said.
The group will also add to its payroll 6,500 new employees this year as well as 1,000 college interns, the largest number for a single year in the group's history, the conglomerate said. The new employees include high school and junior college grads for production positions.
Major points in the company's investment strategy includes the development of new technologies for car production, and improving the auto production facilities to produce better quality cars. About 4.6 trillion won out of 5.1 trillion won to be invested in R&D activities will go to the development of environmentally-friendly futuristic vehicles including hybrid cars following the introduction of the Sonata and K5 hybrid models last year.
The group plans to supply 2,500 Ray electric vehicles produced by Kia Motors to government offices, including local autonomous offices, and sell them in the market from 2013. In 2014, the company will develop and sell mid-sized electric cars to lead the popularization of electricity-driven cars. The group has been engaged in the development of hydrogen-powered cars since 2009, such as the Tucson ix and Mohave models, and other new types of cars. This year, the group will put them in the test-driving phase. The carmaker will also increase investments in the development of nucleus technologies for batteries and control so that it will be able to mass produce the cars in 2015.
Of the 9 trillion won set aside for production facilities at Hyundai Motor and its sister Kia Motors, some 2 trillion won will be invested in the expansion of Kia's plant in Gwangju, South Jeolla Province and other new plants at home and overseas with a focus on upgrading the quality of cars and production facilities. The Gwangju plant will be able to turn out 620,000 cars, up from the current 500,000, when its expansion is completed in 2013. Hyundai Motor's third plant in Beijing will be completed in the latter half of this year, at the same time as its Brazilian motor plant.
The carmaker also plans to invest 300 billion won towards improving its marketing campaigns and after services to upgrade its brand image, bringing the total investment in the auto sector to 3 trillion won.
Hyundai Steel will also invest 1.5 trillion won into the construction of its No. 3 blast furnace which broke ground last April and is targeted for completion in September 2013. Hyundai Hysco will pour 700 billion won into the construction of a cold-rolled steel plant in Dangjin, South Chungcheong Province, capable of turning out 1.5 million tons of the steel product per year, which is slated to go online in May 2013.
Officials of the group said they will continue to invest in the development of environmentally-friendly and highly effective vehicles with most of the investments to go to domestic auto plants to make them globally competitive.
The group's increased investments this year is possible thanks to its 18 trillion won in profit last year, including 8.3 trillion won from Hyundai Motor, 3.7 trillion won from Kia Motors, and 2.8 trillion won from Hyundai Mobis. nw