Hyundai to invest $16.7 billion in South Korea in 2025

Hyundai Motor Group has announced plans to invest a record 24.3 trillion won ($16.65 billion) in South Korea this year, marking a 19% increase in domestic investment compared to last year.

The investment aims to secure future growth for the company despite facing economic and political uncertainties.

The group, which includes Hyundai Motor and Kia Corp, is the third-largest vehicle manufacturer globally, following Toyota Motor and Volkswagen.

The planned investment includes 11.5 trillion won for research and development focused on next-generation products, electrification, software-defined vehicles, hydrogen-fueled products, and other technological advancements.

Additionally, Hyundai Motor Group will allocate 12 trillion won for regular investments, such as adjusting production lines for electric vehicles and new models, and approximately 800 billion won for strategic investments, including autonomous driving.

The group emphasized that the large-scale investment is essential to overcome challenges and ensure future growth amid increasing uncertainties, although it did not specifically mention the nature of the crisis it is facing.

Hyundai Motor Group Executive Chair Euisun Chung recently highlighted global economic risks, including a potential recession and geopolitical conflicts, as external factors affecting the company.

Following the announcement, shares of Hyundai Motor and Kia rose by 2.3% and 3.8%, respectively, while the broader market saw a slight increase of 0.1%. Hyundai Motor and Kia are aiming for a 2% growth in global sales, targeting 7.39 million vehicles in 2025 after a dip in 2024 sales.

The announcement comes amid a decline in South Korean consumer sentiment in December, which experienced the largest drop since the 2020 pandemic, largely due to political uncertainty following President Yoon Suk Yeol’s declaration of martial law and impeachment.

In the U.S., President-elect Donald Trump has threatened to impose a 10% tariff on imported goods, adding further uncertainty.

Hyundai Motor had previously started production at a new plant in Georgia to qualify for U.S. tax credits under the Biden administration, which could be at risk under Trump’s proposed tariff policies.