Bloomberg reports that Hyundai Motor Co. joined automakers in pledging massive spending in the years ahead. The news service says the move is designed to address the industry’s transformation and fend off new competition from the likes of Tesla Inc.
Hyundai, based in South Korea, plans to invest $40 billion over the next five years in development of new models and technologies for electrified and autonomous vehicles as well as transportation services. The average annual spending will be 58% more than over the past five years, the company said in a recent statement.
After a decade-long boom, the world’s fifth-biggest carmaker and competitors are facing cooling demand in China, Europe and the U.S. That challenge is exacerbated by technology shifts such as the rising popularity of ride-hailing services that are making vehicle ownership less necessary.
Hyundai Motor said it wants to lead “the paradigm change facing the automotive industry.”
The company also said it will achieve an operating profit margin of 7% by 2022. Hyundai Motor’s profitability has been less than that in each of the past four years, according to data compiled by Bloomberg.
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