Following Seoul's trade agreement with Washington, South Korean automaker Hyundai Motor Group announced on Monday that it would invest an unprecedented $85.8 billion in the nation over the next five years. It was dubbed "the company's largest ever domestic investment commitment" by Hyundai.
"A significant portion of the investment will focus on new businesses based on advanced AI technologies, such as robotics, contributing to the development of Korea's AI and Robotics innovation ecosystem," the company stated in a news release.
The strategy "highlights the Group's agility in actively responding to the rapidly changing global business environment" , it stated. The company stated that the development of "AI, software defined vehicles (SDVs), electrification, robotics, and hydrogen" will account for about 40% of the total spending. It further stated that by 2030, the investment would contribute to a 13% increase in South Korean automobile exports to 2.47 million units.
The declaration comes after Samsung Group, another significant conglomerate whose flagship company is Samsung Electronics, made a similar commitment to invest $310 billion over the same time span, mostly in artificial intelligence technology.
As one of the leading producers of memory chips worldwide, Samsung Electronics supplies essential parts for the AI sector and the infrastructure that supports it. Kia is part of Hyundai Motor Group, which sold over 7.2 million cars in South Korea and abroad last year.
The investment pledges come after Seoul and Washington signed a new trade agreement that will lower tariffs on South Korean exports, notably Hyundai cars, from 25% to 15%. However, the new tariff is still much higher than the 2.5 percent that was previously in place under a free trade agreement.
