GM Korea, Renault Samsung Motors and SsangYong Motor -- the nation’s three carmakers affiliated with foreign auto giants -- reduced investments in research and development last year despite stellar sales, their regulatory filings showed on May 16.
GM Korea, the Korean unit of General Motors, reduced its R&D spending 5.49 percent to 614.05 billion won (US$549.36 million) in 2016 despite strong annual sales. The company sold 180,275 units in 2016, the highest since its establishment in 2002.
Renault Samsung, the local unit of French Renault Group, spent 143.6 billion won in R&D, down 3.68 percent from the previous year. Last year, the automaker sold 111,087 units in the domestic market, up 6.1 percent on-year. It posted 6.24 trillion won in revenue and 417.5 billion won in operating profit, up by 24.5 percent and 35 percent, respectively from the previous year, on the back of SM6 sedan and QM6 SUV.
The R&D spending of SsangYong Motor, owned by Indian auto giant Mahindra & Mahindra, reached 155.5 billion won last year, down 6.26 percent from the previous year. Last year, SsangYong’s profit turned to black for the first time in nine years.
Their reduced R&D spending is raising eyebrows as they have been criticized for pouring less resources into new car development while focusing more on car sales.
In the meantime, the nation’s top two carmakers Hyundai Motor and its sister firm Kia Motors saw their R&D spending soar more than 8 percent last year. Hyundai and Kia spent 2.35 trillion won and 2.17 trillion won on R&D, respectively.
The two firms have vowed to increase R&D spending to tackle their unprecedented sales sump at home and abroad.
By Ahn Sung-mi (firstname.lastname@example.org