Hyundai Motor Group to reshore $5.9 billion for domestic EV plants

By Kim Hyun-bin, The Korea Times - Hyundai Motor Group plans to draw $5.9 billion in reserve funds from its overseas subsidiaries to invest in the conversion of production facilities for electric vehicles (EVs) in Korea, according to company officials Monday. Known as "capital reshoring," the move involves converting overseas income previously intended for foreign investment into domestic investment. 

Korea's third-largest business group said the dividends it received from its overseas subsidiaries increased 4.6 times compared to the previous year, reaching $5.9 billion this year. About 79 percent will be remitted to its Seoul headquarters this month, while the remaining 21 percent will be brought into the country in the second half of the year. The specific amounts for each subsidiary are: Hyundai Motor Company $2.1 billion, Kia $3.3 billion and Hyundai Mobis $200 million.

Hyundai Motor Group plans to allocate these funds primarily for the establishment of EV-dedicated factories in Ulsan, South Gyeongsang Province, and Gwangmyeong, Gyeonggi Province, as well as for the establishment of Kia's EV factory in Hwaseong, Gyeonggi Province. Hyundai Motor plans to start the operation of a 150,000-vehicle-capable EV plant at its main Ulsan plant by 2025. In April, Kia began the construction of an EV plant with a production capacity of 150,000 inside its existing Hwaseong factory with a goal to start production by late 2025.

The overseas dividends will be used for research and development investments, including the development of next-generation EV platforms, expansion of product lineups, development of key components and advanced technologies and the construction of research facilities.

The dividend amounts from overseas subsidiaries of Hyundai Motor Group were only $100 million in 2020 and $600 million in 2021, during the COVID-19 pandemic. Following an increase to $1.3 billion in 2022, this year's dividend payment has significantly expanded again to $5.9 billion.

The overseas subsidiaries that increased their dividends are companies that have accumulated significant retained earnings due to improved business performance over the past two years. Hyundai Motor increased dividends for its U.S. subsidiary Hyundai Motor America (HMA), Indian subsidiary Hyundai Motor India (HMI) and Czech production subsidiary Hyundai Motor Manufacturing Czech (HMMC), while Kia increased dividends for its U.S., Slovakian and European subsidiaries.

Source: https://www.koreatimes.co.kr/www/tech/2023/06/419_352810.html 

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