Hyundai pledges record $85.8bn investment in South Korea

SEOUL: South Korean auto giant Hyundai Motor Group pledged on Monday an unprecedented $85.8 billion investment in the country over the next five years, a move that comes on the heels of Seoul’s trade deal with Washington.

Hyundai called it “the company’s largest-ever domestic investment commitment”.

“A significant portion of the investment will focus on new businesses based on advanced AI technologies, such as robotics, contributing to the development of Korea’s AI and Robotics innovation ecosystem,” the company said in a press release.

The roadmap “highlights the Group’s agility in actively responding to the rapidly changing global business environment”, it added.

Around 40 percent of the total spending will go into developing “AI, software defined vehicles (SDVs), electrification, robotics, and hydrogen”, the company said.

It added that the investment would help boost exports of South Korea-made vehicles by 13 percent to 2.47 million units by 2030.

The announcement follows a similar pledge by Samsung Group, another major conglomerate whose flagship firm is Samsung Electronics, which vowed to invest $310 billion over the same period, largely in artificial intelligence technologies.

Samsung Electronics is already one of the world’s top memory-chip makers, providing crucial components for the AI industry and the infrastructure it relies on.

Hyundai Motor Group, which includes Kia, sold more than 7.2 million vehicles last year in South Korea and overseas combined.

The investment commitments follow Seoul’s conclusion of a new trade deal with Washington, under which South Korean exports, including Hyundai vehicles, will face a reduced tariff rate of 15 percent, down from 25 percent.

But the new rate still remains significantly higher than the previous 2.5 percent applied under an existing free trade pact.