Hyundai Motor Group, the South Korean manufacturing group that includes Hyundai Motor Co. and Kia Motors Corp., plans to invest $12.2 billion in facilities and r&d in 2012.
The investment represents a 15.6 percent increase from 2011 spending levels, the company said. Approximately $4.4 billion will be spent on r&d efforts to “accelerate the development of eco-friendly and fuel-efficient vehicles,” Hyundai said.
Approximately $7.9 billion of the investment is earmarked for facilities. About $2.6 billion of that $7.9 billion will be used to upgrade and construct manufacturing facilities in South Korea and overseas markets. Hyundai Motor Group’s steel production operations in South Korea also will see a portion of the $7.9 billion facilities investment.
The investment outlays come at a time when Kia and Hyundai are on a roll, including record sales in the U.S. market. Many Hyundai and Kia plants are operating at or near capacity. In the U.S. market, Hyundai-Kia dealers had just a 30-day supply of vehicles on Dec. 1, the second-lowest supply in the industry and less than half the industry average — 61 days worth of vehicles on hand.
In October, Hyundai and Kia said they aimed to sell about 7 million vehicles globally next year compared with more than 6.5 million this year. Hyundai and Kia, which together rank fifth in global auto sales, have been stellar performers during the global economic downturn, gaining market share from Japanese and U.S. rivals.
The South Korean brands have warned that their rapid volume growth will slow because of limited manufacturing capacity, which prevents them from hiking output sharply to meet demand. In its brief statement, Hyundai did not disclose projects to be funded by the investment.
South Korean business newspaper MK Business News, quoting an unnamed Hyundai Motor Group official, said Hyundai-Kia plans to build a manufacturing plant in South Korea and another overseas and to expand a plant in Gwangju, South Korea. No timeframe was provided for the moves, the paper said.