SEOUL: Hyundai, South Korea’s Motor Company, plans to spend around $1.8 billion by 2020 on a major offensive in commercial vehicles, including entering the race in the United States, to catch up with rivals in a rapidly growing global market.
Hyundai, the world’s No.5 automaker when paired with sister KIA Motors Corporation, has targeted a market it sees growing almost 30 per cent in each of the next five years, but where its share ex-China is a paltry 2.1 per cent. In 2014, its commercial vehicle sales fell at home, in China and elsewhere.
Further to expand, Hyundai said it will invest 400 billion won ($363.13 million) to raise production of vans, trucks and buses in Korea by 2020, and that it has earmarked 1.6 trillion won for research and development in such vehicles until the end of the decade.
Hyundai also said it plans to introduce “premium models in North America and Europe,” without providing a time frame or other details.
Hyundai lost share in the overall vehicle market last year in the United States, partly due to having few fuel guzzling pickup trucks and sport utility vehicles segments which surged in popularity as oil prices plunged.
Analyst said the US is Hyundai’s second biggest overseas market after China. To launch commercial vehicles there and challenge established rivals will take considerable time.
Suh Sung moon said that Hyundai and KIA need to bolster their weak commercial vehicle business to reach an annual production capacity of 10 million vehicles, from about 8 million currently.
