Hyundai Motor Group to invest record $16.7 billion in South Korea this year

The investment includes 11.5 trillion won in research and development for next-generation products, electrification, software-defined vehicles, hydrogen-fuelled products

FILE PHOTO: The logo of Hyundai Motor Company is pictured at the New York International Auto Show, in Manhattan, New York City, US, Apr 13, 2022. REUTERS/Andrew Kelly/File Photo

South Korea's Hyundai Motor Group said on Thursday it planned to boost domestic investment by 19% to a record high of 24.3 trillion won ($16.65 billion) this year to secure future growth even as it grapples with economic and political uncertainties.

Hyundai Motor Group, including Hyundai Motor and Kia Corp, ranks third in global vehicle sales behind Toyota Motor and Volkswagen.

The planned investment by Hyundai Motor Group includes 11.5 trillion won in research and development for next-generation products, electrification, software-defined vehicles, hydrogen-fuelled products and other technology.

It will also spend 12 trillion won on ordinary investments such as adjusting production lines to make electric vehicles and new models and about 800 billion won on strategic investments such as for autonomous driving, the statement said.

"Hyundai Motor Group is making the largest investment ever in South Korea this year because it believes that continuous and stable investments are essential to overcome the crisis and secure future growth engines in the face of growing uncertainties," the group said, without directly describing the crisis it faced.

Hyundai Motor Group Executive Chair Euisun Chung last week referred to a recession and global conflicts as external risks for the company.

Shares in Hyundai Motor and Kia were up 2.3% and 3.8% respectively in early trade after the news, while the broader market was up 0.1%.

Hyundai and Kia said last week they aimed to grow their combined global sales by 2% to 7.39 million vehicles in 2025, after reporting a dip in 2024 sales and missing their targets.

South Korea's consumer sentiment dropped the most since the 2020 pandemic in December, hit by political uncertainty following President Yoon Suk Yeol's declaration of martial law and his impeachment.

In the United States, President-elect Donald Trump has threatened to impose universal 10% tariffs on imported goods.

Hyundai Motor started production at a new factory in the US state of Georgia last year to make its vehicles eligible for the Biden administration's tax credits, which Trump threatened to scrap.