South Korea’s top automaker Hyundai Motor Co. plans to invest a total 61.1 trillion won ($51.2 billion) over the next six years to hone productivity and competitiveness with an aim to deliver operating margin of over 8 percent by 2025, the company said on Wednesday.

In a mid-to long-term presentation to institutional investors during an Investor Day event in Yeouido, Seoul, Hyundai Motor pledged 41.1 trillion won to improve existing business capacity and 20 trillion won in future technology such as electric motion, mobility, and autonomous vehicle. The auto giant also raised its operating margin target for vehicle business from 7 percent in 2022 to 8 percent in 2025.

Hyundai Motor will invest an annual average of 10 trillion won from next year – up from 6.1 trillion won in 2018 and 7.8 trillion won in 2019.

Hyundai Motor, in particular, will invest 26.5 trillion won in new vehicle development and products such as improving fuel efficiency and 11.9 trillion won in facility expansion. It will spend 7.8 trillion won on new businesses including 1.8 trillion won in mobility service and platform sector, 1.5 trillion won on robotics, and 1.8 trillion won on urban air mobility. Another 1.6 trillion won will be spent on autonomous vehicle sector and 900 billion won in connectivity and another 9.7 trillion won on electric motion such as electric car production.

Hyundai Motor allocated a total 12 trillion won for strategic equity investment over 6 years including 1.7 trillion won next year. Investment source will be raised through profit improvement by 2022. The company will aim to save 34.5 trillion won in costs over the next 5 years.

Hyundai Motor told investors that it expects to hold about 11 trillion won in liquidity by the end of this year before cash flow improves after 2022.

The company, as a smart mobility solution provider, also pointed to “innovation” as a strategic intention point. It plans to transform business structure to one that provides both intelligence mobility product and service.

Hyundai Motor also set an aim to become the world’s third-largest producer of electric and hydrogen-electric cars by 2025 and account for more than 5 percent of the global auto industry.

The company will also continue to put out efforts to improve shareholder value.

In a board meeting on Wednesday, Hyundai Motor decided to buy back 300 billion won worth of own shares by February, next year, to boost shareholder value and build market trust.

On Wednesday, Hyundai Motor shares gained 0.41 percent to finish at 122,000 won in Seoul.

By Park Yun-gu and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]