Kia chooses Coupang as first partner for purpose-built vehicle rollout

Kia Corp., South Korea’s second-largest automaker, has chosen Coupang Inc. as its first partner for the production of a purpose-built vehicle (PBV), integral to Kia’s future mobility strategy.

The two companies said on Friday that they recently signed a memorandum of understanding on joint research and development of a custom-tailored vehicle for Coupang, Korea’s e-commerce giant.

Under their partnership, Kia and Coupang aim to launch a new Coupang delivery vehicle best suited for product storage as well as loading and unloading by 2025.

The “futuristic Coupang car” will be based on a new automotive platform, or skateboard, according to the companies.

Once the PBV is successfully launched, the two companies plan to expand their cooperation to eventually develop autonomous and electric Coupang cars.

“Based on this partnership, Kia will advance its technology to meet various needs of delivery and logistics companies around the world,” said a Kia official.

The partnership comes after Kia, an affiliate of Hyundai Motor Group, said last month it is looking to build a new car manufacturing plant in Korea for the first time in 25 years to produce purpose-built vehicles.

The market for personalized vehicles has great potential as such cars can be used for various purposes such as public transportation, clinics, cafes, living space and freight transfer, Kia Chief Executive Song Ho-sung said.

Kia plans to break ground on the construction of its PBV manufacturing facility next year with an aim to start mass production in 2025.

Kia’s PBV business is part of its future mobility strategy dubbed Plan S, meaning a plan for a shift toward future mobility. The company expects purpose-built vehicles to account for about a quarter of all cars sold globally by 2030.

KOREAN VERSION OF AMAZON

The partnership is expected to help Coupang, widely seen as the Korean version of global e-commerce giant Amazon.com, expand its business scope to the logistics business for other e-commerce operators.

Coupang is looking to tap into the country’s logistics industry, where CJ Logistics Corp. is the dominant player. The company has already obtained state approval for the third-party delivery service via its logistics subsidiary Coupang Logistics Services.

Currently, Coupang operates about 5,000 vehicles for its own quick delivery service, called Rocket Delivery.

If it seriously begins the third-party delivery service for other e-commerce operators, Coupang will need tens of thousands of PBVs, industry watchers said.

The first Korean company directly listed on the New York Stock Exchange, Coupang is partly owned by the SoftBank Vision Fund, run by SoftBank Group founder Masayoshi Son.

Other major investors in Coupang include Greenoaks Capital Partners, Maverick Capital, BlackRock and Morgan Stanley.

Write to Han-Shin Park at phs@hankyung.com
In-Soo Nam edited this article.