Hyundai Motor aims for next takeoff with $51 billion investment

Hyundai Motor Group plans to spend 68 trillion won ($51 billion) and hire 80,000 new employees over three years as South Korea’s top automaker aspires to become the leader in electrification, software-defined vehicles (SDVs) and future mobility.

Hyundai, the country’s third-largest conglomerate in terms of assets, said on Wednesday it will invest 68 trillion won in Korean operations by the end of 2026 to bolster its growth potential in electric vehicles and future mobility projects, including SDVs.

More than half the investment, or 35.3 trillion won, will be allocated for new research and development infrastructure, expansion of EV production facilities and construction of its new headquarters, dubbed the Global Business Center (GBC), Hyundai said in a statement.

Some 31.1 trillion won, or 46% of the total, will go to the R&D sector to enhance vehicle competitiveness, electrification, SDVs and battery technology.

The automotive group said 1.6 trillion won will be used for “strategic investments” in new mobility, software and autonomous driving technology.

The total 68 trillion won investment means 22.7 trillion won on average in annual spending by the end of 2026, 30% higher than the 17.5 trillion won in capital spending earmarked for 2023.

Hyundai Motor Group affiliates include Hyundai Motor Co., Kia Corp., auto parts maker Hyundai Mobis Co., Hyundai Engineering & Construction Co. and Hyundai Rotem Co.

Hyundai Motor and Kia together are the world’s third-largest automaker by sales after Toyota Motor and Volkswagen.

TO EXPAND EV LINEUP TO 31 MODELS BY 2030

With the investment, Hyundai Motor Group said it plans to expand its EV lineup to 31 models by 2030

The conglomerate also plans to raise its annual EV production in Korea to 1.51 million by 2030.

One key strategic segment Hyundai Motor Group is focusing on is the development of software-defined vehicles or SDVs.

Chief Executive Chang Jae-hoon said during Hyundai’s annual general meeting last week that the automaker will establish an advanced vehicle platform headquarters to lead its SDV projects.

SDVs, often referred to as smartphones on wheels, enable constant and seamless upgrades of a car’s functions through an over-the-air system throughout the car’s lifetime. Hyundai said it eventually aims to turn all its vehicles into SDVs.

AGGRESSIVE NEW HIRES

In sync with the 68 trillion won investment, Hyundai said it will hire 80,000 new employees, including 13,000 older, experienced workers, over three years to support its growth strategy.

A majority of the new jobs created will be to promote its future businesses, with 44,000 new staff in electrification, SDVs and carbon neutrality.

Its planned hiring will lead to the creation of an additional 118,000 new jobs in related companies such as subcontractors, it said.

New jobs will also be created in sectors such as the GBC project, the next-generation nuclear power business, including small modular reactors (SMRs), and smart logistics.

“Through this investment and new hiring, we aim to secure strong growth engines even in the era of ‘Big Blur,’ which respects no national or industrial boundaries,” Hyundai said in the statement.

NEW HEADQUARTERS

While unveiling its three-year investment plan on Wednesday, Hyundai also updated its Hyundai Global Business Center project.

Back in 2016, the carmaker said it would build a 105-story skyscraper to pull all its affiliates together under one roof.

The plan, however, ran into objections from the Korean Air Force over safety concerns and Hyundai executives due to heavy costs.

Hyundai changed the original plan later and said it would build two 50-story buildings and annexed facilities.

The construction of Hyundai’s new headquarters in Samseongdong, a neighborhood in Seoul’s upscale business district of Gangnam, will require 4.6 trillion won in investment by 2026 and create 9,200 new jobs by then, according to Hyundai.

The company said construction work will begin in the second half of next year upon approval by the Seoul Metropolitan Government.

Write to Nan-Sae Bin and Chae-Yeon Kim at binthere@hankyung.com

In-Soo Nam edited this article.