South Korea’s Hyundai Motor, the fifth largest automaker in the world when paired with affiliate Kia Motors, is preparing its foray into the lucrative commercial market with a $1.8 billion investment plan through 2020.
As part of the strategy, the South Korean automaker also plans to tap into the commercial vehicle market in the United States, while also investing heavily to catch up to global rivals on a worldwide level. The rapidly growing market is forecasted to climb close to 30 percent during the next half a decade – but Hyundai has a mere 2.1 percent of the commercial vehicle segment after last year sales of the sector slowed at home in Korea, in China and elsewhere. For the planned expansion, Hyundai announced it would pour 400 billion won ($363.13 million) to increase production output of vans, trucks and buses in its home country by 2020. An additional 1.6 trillion won has been set aside for research and development in the segment before the decade ends. In a recent statement, Hyundai also said it mulls the production of “premium models in North America and Europe,” though they refrained from providing any specifics.
Hyundai, which counts the United States as one of its largest markets, had seen dwindling market share last year while almost all others grew – partly due to the fact that the Koreans are not well represented in the surging pickup truck and SUV segments. The, US, Hyundai’s second-largest overseas market following China, will also prove a tough nut to crack when it comes to commercial vehicles, analysts warn, with a long schedule for the necessary vehicles to challenge the established market players.