SEOUL (Reuters) - South Korea’s Hyundai Motor Group, the world’s fifth-largest automaker, said on Tuesday it would spend $73 billion over four years on expanding capacity, building new headquarters and developing new vehicles.
The country’s second-largest business conglomerate unveiled the investment plan as the government of President Park Geun-hye pushes companies with large cash reserves to spend more on investment, employment and dividend payments.
The group, whose 57 affiliates include automakers Hyundai Motor Co (005380.KS) and Kia Motors Corp (000270.KS), said in a statement it would spend 49.1 trillion won on capital investment and 31.6 trillion won on research and development by 2018.
It did not elaborate, but the announcement came after Hyundai Motor and Kia Motors said they would build factories in Mexico and China over the coming years, signaling a resumption in capacity expansion.
Hyundai Motor and Kia Motors said they would sharply boost spending to develop, for instance, more eco-friendly vehicles and self-driving cars over the next four years.
The group said in a statement some three-quarters of the investment would be made within South Korea, which would “greatly contribute” to re-energizing the local economy.
A large part will likely go into a plot of land that three group units agreed to purchase for 10.55 trillion won, far above the market’s estimate.
The group’s total investment plan compares with South Korea’s national capital investment of 127 trillion won over the past year, central bank data shows.
Shares in Hyundai Motor and Kia Motors were down 1.8 percent and 1.2 percent respectively as of 11.53 p.m. ET, largely in line with the wider market’s 1.7 fall.
Reporting by Hyunjoo Jin; Editing by Choonsik Yoo