Wed, Jan 07, 2015 - Page 15 News List

Hyundai to spend US$73.6 billion on factories, R&D

AP, SEOUL

The headquarters building of South Korean state-run Korea Electric Power Corp stands in an expansive campus in southern Seoul in an undated photo made available on Friday. Hyundai Motor Group chairman Chung Mong-koo said on Friday that the company would build a 105-story building on the land as part of a global business center that incorporates its affiliates, a hotel and an auto theme park, modeled after Germany’s Autostadt, by 2020. Hyundai Motor Group won a bidding war against Samsung Electronics Co last year to buy the land with a US$10.14 billion offer.

Photo: EPA

Hyundai Motor Group, the world’s fifth-largest automaker, said yesterday it plans to spend 81 trillion won (US$73.6 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 four years is a 35 percent increase from last year.

The company plans to build two new factories in China, which will start operating late next year and in 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 which are to include auto-themed exhibition halls, hotels and shopping malls in Gangnam, a trendy district in southwestern Seoul. It said in September last year that it would pay US$10.1 billion for a 79,342m2 plot of land for the new headquarters that the auto group believes will burnish its brand.

The expansion of factories at home and abroad, as well as the construction of the new headquarters in Seoul will account for more than half of the four-year investment at 49.1 trillion won.

The group will spend 31.6 trillion won on research and development 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.

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