Upgrading Plants at Home and Abroad
The Hyundai Motor Group will make a massive investment in facilities in the remaining period of this year. They are set to spend about two trillion won (US$1.8 billion), which accounts for more than 40% of the total facility investment budget planned for this year.
According to the automobile industry on Nov. 22, Hyundai and Kia have invested a total of 3.3 trillion won (US$2.9 billion) in their global facilities until the third quarter. Of the total, Hyundais' share was 1.8 trillion won (US$1.6 billion). The amount represented 60% of their investment taget of 5.8 trillion won (US$5.2 billion) for 2018.
When taking this into consideration, funds to be invested in the fourth quarter will reach 2.5 trillion won (US$2.2 billion). The carmakers will invest about 2 trillion won (US$1.8 billion) in the Korean market for two months from November to December.
Investment will also be made in overseas production plants. Hyundai Motor plans to invest 100 billion won each in the U.S., India and the Czech Republic by the end of next month. Kia Motors plans to invest upwards of 400 billion won (US$360 million) in factories in the U.S., Slovakia and India at the end of the year.
Kia Motors have already invested 135 billion won (US$121 million) r in its Mexico factory, an advanced base for the North American market, exceeding the 131.2 billion won (US$118 million) allocated for this year. Industry analysts say the large investment in Mexico shows Kia is putting priority on its factory in Mexico.
Both Hyundai Motor and Kia Motors are mapping out business plans for next year. However, it is unclear whether or not their facility investment funds will be maintained at this year's levels. This is because their third quarter earnings were meager and uncertainties inside and outside them are still lingering. It is difficult to formulate an aggressive investment plan because it is a big challenge to predict the global auto market next year.
However, it is expected that investment in the research and development (R&D) sector will be significantly expanded as Chung Eui-sun, executive vice chairman of the Hyundai Motor Group, is pushing to expand the group's future mobility capabilities.