South Korea-based auto group plans record investment in factories, research and development, new headquarters
SEOUL, South Korea—Hyundai Motor Group, the world’s fifth-largest automaker, said it plans to spend US$73.7 billion over the next four years on factories, research and a new headquarters.
The announcement comes after Hyundai Motor Co. last week forecast the slowest annual sales growth in more than a decade.
The South Korean government has pressured businesses to stop hoarding cash reserves and instead invest and hire more.
Hyundai said the average annual spending during the coming four years is a 35 per cent increase from 2014.
The company plans to build two new factories in China, which will start operating in late 2016 and 2017 as its existing factories reach full capacity.
Its affiliate Kia Motors Corp. is also expanding the capacity of its existing Chinese factory.
The group will also build new headquarters, including auto-themed exhibition halls, hotels and shopping malls, in Gangnam, a trendy district in southwestern Seoul, South Korea.
It said in September that it would pay US$10.1 billion for a 854,030-sq.ft. plot of land for the new headquarters that the auto group believes will burnish its brand.
The expansion of factories at home and abroad and the construction of the new headquarters in Seoul will account for more than half of the four-year investment.
The group will spend US$28.7 billion on research and development (R&D) for low emission vehicles, smart cars and other technologies.
By 2018, its affiliated companies will hire 7,345 employees in R&D including about 3,000 workers to develop low emission and smart car technologies.