By Hyunjoo Jin and Joyce Lee
SEOUL (Reuters) – South Korea’s Hyundai Motor ( OTC: ) Group said on Thursday it plans to boost domestic investment by 19% to a record 24.3 trillion won ($16.65 billion) this year to ensure future growth even as struggles with economic problems and political uncertainty.
Hyundai Motor Group, including Hyundai Motor and Kia Corp, is third in global vehicle sales behind Toyota Motor (NYSE: ) and Volkswagen (ETR: ).
Hyundai Motor Group’s planned investment includes 11.5 trillion won in research and development for next-generation products, electrification, software-defined vehicles, hydrogen products and other technology.
It will also spend 12 trillion won on ordinary investments such as adapting production lines to produce electric vehicles and new models, and about 800 billion won on strategic investments such as autonomous driving, the statement said.
“Hyundai Motor Group is making its largest investment ever in South Korea this year as it believes that continued and stable investment is key to overcoming the crisis and securing future growth drivers amid growing uncertainties,” the group said, without directly describing the crisis it faced.
Hyundai Motor Group CEO Euisun Chung said last week that the recession and global conflicts are external risks for the company.
Shares in Hyundai Motor and Kia rose 2.3% and 3.8% respectively in early trade after the news, while the broader market rose 0.1%.
Hyundai and Kia said last week that they aim to increase their combined global sales by 2% to 7.39 million vehicles in 2025, after reporting a decline in sales in 2024 and missing their targets.
Consumer sentiment in South Korea fell the most since the 2020 pandemic in December, hit by political uncertainty after President Yoon Suk Yeol declared a state of emergency and lifted it.
In the United States, President-elect Donald Trump has threatened to impose universal tariffs of 10% on imported goods.
Hyundai Motor started production at a new plant in the US state of Georgia last year to make its vehicles eligible for the Biden administration’s tax breaks, which Trump has threatened to end.
($1 = 1459.6900 Won)
