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Automobile industry

Hyundai Motor Group Delays Mass-Produced Hybrid Cars

Strategic Insights

— 1 min read

Hyundai Motor Group, South Korea's leading automotive conglomerate, has pushed back its plan to roll out mass-produced hybrid cars by at least three years to 2009 due to concerns over profitability. The group had initially aimed to start selling mass-market hybrid cars by the end of 2004, but has only managed to sell less than 400 hybrid cars to government agencies since 2004. Industry observers believe the company is facing pressure from producing hybrid cars, which are known to be costly. The delay comes as the group's chairman, Chung Mong-koo, is currently in custody and facing charges of embezzlement in a slush fund scandal.

Key Takeaways:

  • Hyundai Motor Group has delayed the roll-out of mass-produced hybrid cars by at least three years to 2009 due to profitability concerns.
  • The company had initially planned to start selling mass-market hybrid cars by the end of 2004, but has only managed to sell less than 400 hybrid cars to government agencies since 2004.
  • The delay is attributed to the high costs of producing hybrid cars, which run on both an internal combustion engine and an electric motor.
  • Hyundai Motor Group's chairman, Chung Mong-koo, is currently in custody and facing charges of embezzlement in a slush fund scandal, which may have contributed to the delay.
  • The company's flagship, Hyundai Motor Co., has also indefinitely postponed the construction work on its planned automotive plant in the Czech Republic.
  • The plant, which was expected to cost 1 billion euros, is still set to be established, but the construction work will be delayed pending further developments.

Statistics:

  • Less than 400 hybrid cars have been sold by Hyundai Motor Group to government agencies since 2004.
  • 100 billion won (approximately US$106 million) has been misappropriated by corporation funds according to charges filed against Hyundai Motor Group chairman Chung Mong-koo.
  • 400 billion won in damages has been caused to the auto conglomerate according to the charges filed against Chung Mong-koo.
  • The planned automotive plant in the Czech Republic will cost 1 billion euros.
  • The construction work on the Czech plant has been indefinitely postponed.

Sources:

  • "Hyundai Motor Group delays launch of mass-produced hybrid cars," Asia Pulse, May 18.
  • "Hyundai Motor Co. flags enthusiasm for Czech plant," Yonhap News, May 18.

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