Hyundai Motor Group will invest 16.7 billion dollars in South Korea this year

Hyundai Motor Group announced plans to invest a record 24.3 trillion won ($16.65 billion) in South Korea this year, marking a 19 percent increase in domestic investment compared to last year.

The investment aims to secure future growth for the company despite economic and political uncertainties.

The group, which includes Hyundai Motor and Kia Corp, is the world’s third-largest vehicle maker, after Toyota Motor and Volkswagen.

The planned investment includes 11.5 trillion won for research and development focused on next-generation products, electrification, software-defined vehicles, hydrogen-fueled products and other technological developments.

In addition, Hyundai Motor Group will allocate 12 trillion won for regular investments, such as adapting production lines for electric vehicles and new models, and about 800 billion won for strategic investments, including autonomous driving.

The group stressed that the large-scale investment is necessary to overcome challenges and ensure future growth amid growing uncertainties, although it did not specify the nature of the crisis it is facing.

Hyundai Motor Group Executive Chairman Euisun Chung recently highlighted global economic risks, including possible recession and geopolitical conflicts, as external factors affecting the company.

After the announcement, shares of Hyundai Motor and Kia rose 2.3% and 3.8% respectively, while the broader market edged up 0.1%. Hyundai Motor and Kia are aiming for a 2 percent increase in global sales, targeting 7.39 million vehicles in 2025 after a decline in 2024 sales.

The announcement comes amid a decline in South Korean consumer sentiment in December, which saw its biggest decline since the 2020 pandemic, largely due to political uncertainty following the declaration of martial law and the impeachment of President Yoon Suk Yeol.

In the US, President-elect Donald Trump has threatened to impose 10% tariffs on imported goods, adding further uncertainty.

Hyundai Motor had previously started production at a new plant in Georgia to qualify for US tax credits under the Biden administration, which could be at risk under Trump’s proposed tariff policies.