Hyundai Motor Group budgets $7.7 bn in capex this year for EV push

2021.03.17 14:18:01 | 2021.03.17 15:46:29

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South Korean auto conglomerate Hyundai Motor Group has budgeted capital expenditure of a combined 8.76 trillion won ($7.74 billion) for this year, up a modest 8.7 percent from pandemic-ridden year of 2020, mostly going to mass production based on its hard-won EV platform E-GMP.

Hyundai Motor Co. plans to spend 5.86 trillion won on production facilities at home, 292.7 billion won in North America, 220 billion won in Brazil and 199.4 billion won in India. Kia Corp. will invest total 1.89 trillion won, of which 1.19 trillion won is for facilities at home.

Hyundai Motor shares closed 0.85 percent lower at 232,000 won in Seoul on Wednesday, and Kia 1.4 percent down at 84,600 won.

Hyundai Motor Group last year spent 8.06 trillion won to expand and upgrade facilities, up 41.1 percent from the spending in the previous year – Hyundai Motor 6.39 trillion won (up 77.2 percent) and Kia 1.67 trillion won (down 20.7 percent).

Spending in R&D reached 4.78 trillion won in 2020, down 0.5 percent on year. Hyundai Motor spent 3.11 trillion won, up 2.3 percent, while Kia slashed the spending by 5.4 percent to 1.67 trillion won.

For full 2021, Hyundai Motor targets to sell a total of 4.16 million vehicles – 741,500 units at home and 3,418,500 units abroad. Kia aims to sell 2,922,000 units in total. They set conservative sales target for this year after their combined output lost 13.3 percent on year to stop at 5,338,048 units in the pandemic-ridden 2020.

The utilization rate also was lowered to less than 80 percent on average. Hyundai Motor reported an average 84.1 percent in utilization rate – 92.9 percent in Korea, 72.6 percent in North America, 74.5 percent in India, 72.3 percent in Czech Republic, 71.7 percent in Brazil and 68.6 percent in Turkey. Only the Russian factory posted the rate above 100 percent, or 109.6 percent.

Kia’s average utilization rate declined to 85.3 percent at home, the worst since 2005. Overseas factories were more serious with the rate at 81.3 percent in Slovakia, 65.9 percent in the U.S., 51.7 percent in Mexico, and 54 percent in India.

Despite plunged factory operation and output, the Korean auto conglomerate last year achieved record-high yearly revenue thanks to strong sales of high-profit models like recreational vehicles.

Hyundai Motor delivered yearly revenue of 104 trillion won, achieving the annual milestone of 100 trillion won for two consecutive years. Kia posted 59.17 trillion won in full-year revenue 2020, up 1.8 percent on year to mark best-ever sales.

By Pulse

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