Hyundai Motor plans to develop environment-friendly cars despite the segment’s low profitability and an industry downturn, a senior executive said on Thursday.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Yang Woong-chul, president of the group’s auto research & development division, also told Reuters the group saw almost “no problem” to its business from the won currency’s recovery trend. A weaker won has helped Hyundai and other South Korean automakers by enhancing price competitiveness and boosting profits from overseas markets.
“It is difficult to get profits from those kinds of cars. But we have to go that way eventually so will go ahead with our eco-friendly model plans,” Yang said in an interview with Reuters on the sidelines of the Seoul motor show.
The group usually allocates 5% of sales for R&D and spends 20-30% of that budget on environment-friendly models such as hybrid cars, said Yang.
Hyundai plans to start mass production of petrol hybrid cars next year and to begin mass production of plug-in hybrids from late 2012.
“The technology has been perfectly proved, but we need time to set up the infrastructure for the models,” Yang said.
Hyundai has unveiled the Elantra LPI, a hybrid version of the popular compact, which will be powered by liquid petroleum gas (LPG) and lithium polymer batteries. South Korea’s LG Chem, which is set to supply battery packs for GM’s Volt, will be the sole provider of batteries for the Hyundai hybrid.
Yang also said he expected global car demand to “slightly” recover on rising appetite for smaller cars and helped by developing markets, but declined to comment on the timing of a rebound.
