Hyundai Motor, Kia Motors and Hyundai Mobis, the three companies making up Hyundai Motor Group, will invest a combined 63 trillion won in the next four years in Korea, the group said on May 24.
Hyundai Motor Group’s massive investment plan may be construed as the group’s bid to ramp up Korea’s role and leadership by investing in electrification and urban air mobility (UAM), plus hydrogen cars and improving the quality of combustion engine parts.
The latest investment scheme came after Hyundai Motor Group Chung Eui-sun revealed a plan to invest a combined $10.5 billion to build another EV plant in Savannah, Georgia, the United States, by 2025 during his meeting with U.S. President Joe Biden.
The automaker group strives to expand the EV car business while maintaining the competitiveness of the conventional Group. It will prioritize EV R&D and upgrade combustion engine car technologies.
The group plans to utilize the United States as an EV construction center. The step is part of the group’s move to stabilize Korea’s related industries amidst the automaker’s paradigm shift into electrification.
If investments by the group’s automotive parts, steel and construction units are counted, the group’s total investments are predicted to shoot up.
Hyundai Motor Group’s latest investments are expected to contribute to not only producing and exporting cars in Korea, but also nurturing the domestic automotive part industry and securing new growth industry engines.
Hyundai Motor Group will pour 16.2 trillion won in the electrification sector, a future growth engine.
The step is designed to secure an upper hand in terms of technology in not only EVs but also hydrogen cars, plug-in, and hybrid EVs. Investments will be used to expand its EV production capacity.
The three companies of the group will build a purpose-based vehicle EV plant, build a combustion engine-EV mixed production system and covert the existing plants into EV lines.
A combined 8.9 trillion won will be poured into the development of new technologies such as robotics and advanced air mobility (AAM). The plan is designed to accelerate efforts to shift the automaker into a “mobility company for human beings.”
The group will develop next-generation wearable robots while accelerating efforts to develop air mobility vehicles on its own.
It is noteworthy that 38 trillion won, the biggest portion of the total investments, will be invested in improving the commercial values of combustion engine vehicles and customer services.
Even though demand for combustion engine vehicles is shifting to EVs, the former will take an 80 percent share of sales target for 2025.
The step is designed to max out combustion engine vehicle customers’ satisfaction.
A Hyundai Motor official said, “It is designed to honor customers’ right to choose combustion engine vehicles instead of expensive EVs.”
The business group expects the step to contribute to maintaining the profitability of combustion engine vehicle part makers.
Hyundai Motor Group has seen the fruits of the effect of the establishment of its EV plant in Alabama, the United States. The group saw its global EV share from 5.1 percent in 2004 to 7.9 percent in 2021.
Experts said the establishment of an EV plant in Savannah, Georgia, will have so-called “Savannah effect,” which will favorably bring benefits to domestic parts makers which are struggling to shift into EVs.
The establishment of the new EV plant in the United States is expected to bring new opportunities to explore overseas markets and expand global sales. The opening of the Alabama EV plant had an effect of jumping automotive parts exports to the United States 488.3 percent.
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