Hyundai will invest 10.5 trillion won ($8.5 billion) over the course of 2023, according to an exchange filing, as it moves to electrify more of its fleet to meet rising consumer demand for cleaner cars.
The money will be spent primarily on research and development and on building a new plant in Georgia, the automaker said.
Hyundai said in May that it’s investing $5.5 billion to build an electric-car assembly and battery plant near Savannah in the U.S. state, with the project expected to break ground in early 2023.
The automaker is also targeting revenue growth of as much as 11.5 percent this year.
Hyundai also increased dividends in an unusual move for the automaker, whose stock rose as much as 6.3 percent following the news.
“Favorable foreign-exchange rates and higher sales of value-added cars led the growth for 2022,” Hyundai Executive Vice President Seo Gang-Hyun said on an earnings call.
He added the global chip shortage that has hampered automakers since late 2020 should ease in 2023.
The company’s marketing costs may rise as competition intensifies, however.
The automaker earlier this month said it aims to sell 4.3 million cars globally this year, or about 10 percent more than 2022.
Affiliate Kia is also targeting growth of 10 percent for a total of 3.2 million vehicles.
Combined, Hyundai and Kia rank as the world’s third-largest automaker behind Toyota and Volkswagen Group.
Automakers from Tesla to VW are boosting production as EVs gain traction.
Elon Musk’s EV pioneer plans to increase output “as quickly as possible” after posting better-than-expected profits, it said Wednesday in the U.S.
Toyota meanwhile earlier this month forecast vehicle production will exceed pre-pandemic levels, expecting output of as many as 10.6 million vehicles this year. VW predicted existing orders will boost sales this year.
Hyundai on Thursday also raised its cash dividend to 3.8 percent for holders of its common stock and 7.6 percent for preferred shareholders.
The payout for 2023 will be similar or higher than 2022, it said.
Operating profit for the three months ended Dec. 31 more than doubled to 3.4 trillion won from a year earlier, the company said Thursday.
Quarterly sales jumped to 38.5 trillion won, up 24 percent from the previous year.
