Hyundai Motors said on Feb. 27 it plans to invest 45 trillion won (US$40 billion) in developing new models and technologies for vehicles over the next five years, mainly to boost shareholder value.
The carmaker publicized its mid- and long-term management plans and financial strategies at the “CEO Investor Day” held at the Federation of Korean Industries in Seoul. As per its plans, roughly 20 trillion will be dedicated to research and development and 14 trillion will be invested for future car technologies including autonomous driving technologies and mobility services.
The automaker also said it will boost the operating profit margin to 7 percent and return on equity to 9 percent by 2022 with efficient capital management. As of end-2018, Hyundai’s operating profit margin fell to some 2 percent and return on equity hit slightly under 2 percent. The announcement marks the first time it has declared a specific profitability goal to shareholders.
Along with the announcement, the world’s fifth-biggest carmaker will secure liquidity worth some 14 trillion won to 15 trillion won to flexibly react to the fast changing market.
By Kim Hye-soo (firstname.lastname@example.org)