Hyundai Motor Group, the parent of both South Korean automakers Hyundai Motor Group and Kia International, will boost investment in facilities, research and development by 16 percent this year largely on its efforts to develop more fuel efficient engines for the two automakers.

Hyundai Motor Group said last week that it will invest 14.1 trillion won (about $12.2 billion U.S. at today's exchange rates) in its plants and research in 2012, up from 12.2 trillion won in 2011. Hyundai Motor Group's R&D investment will increase about 11 percent this year to 5.1 trillion won, and 90 percent of that total will be targeted towards boosting its vehicles' fuel economy and cutting their greenhouse-gas emissions.

With U.S. gas prices up about 27 percent last year, Hyundai has successfully pitched its vehicles' fuel economy to boost sales. Through the first 11 months of last year, Hyundai Motor America increased U.S. vehicle sales by 21 percent from a year earlier to almost 595,000 vehicles and said its fleetwide fuel economy topped 27 miles per gallon. Kia's U.S. sales through November jumped 36 percent from a year earlier, to more than 442,000 vehicles, with models such as the Optima and Sportage more than doubling their sales.

Hyundai and Kia's fleetwide fuel economy figures benefit from the fact that neither company sells large, gas-guzzling SUVs. For the model year 2010, Hyundai and Kia achieved fleetwide fuel-economy levels of 25.9 miles per gallon and 25.1 miles per gallon, putting Hyundai and Kia at No. 1 and No. 3 among the 14 largest automakers when it came to fuel efficiency, according to the EPA.

Hyundai has long marketed its efforts to boost fuel economy through both drivetrain electrification and more efficient gas motors as an integrated effort, even going as far as refusing to break out sales totals for its sole U.S. hybrid vehicle, the Sonata Hybrid. Instead, Hyundai has touted its fleet of vehicles that get at least an EPA-rated 40 miles per gallon highway and said those vehicles – the Sonata Hybrid, Elantra, Accent and Veloster – account for a third of its U.S. sales.

In August 2010, Hyundai garnered attention among fuel-efficiency advocates by saying that it would boost its fleetwide fuel economy for its U.S. cars and light-duty trucks to 50 miles per gallon by 2025, a 43 percent increase from Hyundai's goal for 2015.
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Hyundai Motor Group's Investment Plans for 2012 2011-12-29

- Group to invest 14 trillion won, largest investment plan for Group
- Group to focus on R&D for future cars, secure competitiveness

Hyundai Motor Group, led by South Korea's largest automaker Hyundai Motor Company, announced today that it would invest a total of 14.1 trillion won* in 2012 as part of the Group's largest investment and employment plan ever, mainly to boost its R&D competitiveness.
(*Equivalent to about US$12.2 billion, based on Dec. 28 foreign exchange rates in Seoul)

Hyundai Motor Group will invest 5.1 trillion won in R&D (compared to 4.6 trillion won in 2011) and 9 trillion won in facilities (compared to 7.6 trillion won in 2011). The total investment amount will be a 15.6 percent increase from this year's 12.2 trillion won.

Of the amount to be invested in R&D, 4.6 trillion won, or 90 percent, will be spent on the automobiles sector, to accelerate the development of eco-friendly and fuel-efficient vehicles.

Of the investments in facilities, about 3 trillion won will be spent upgrading and building domestic and overseas manufacturing plants for Hyundai Motor and Kia Motors Corp., as well as strengthening their sales and aftersales service networks. Some 2.2 trillion won will be spent by the Group's steel-related affiliates.

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