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| The Chevrolet Silverados and GMC Sierra pickups built at Flint Assembly are packed on Sept. 21, in this file photo. AP-Yonhap |
By Kim Yoo-chul
Hyundai Motor announced it will reduce its investment in manufacturing as it continues to deal with the global semiconductor shortage.
In a conference call to investors after the release of its third-quarter earnings results Tuesday, the country's largest vehicle manufacturer said it will cut facilities investments to about 8 trillion won from the 8.9 trillion won announced earlier.
According to the new plan, Hyundai Motor will invest 3.3 trillion won in research and development projects and 3.9 trillion won in facilities. Around 800 billion won has been set aside for "strategic investments," though the company didn't elaborate.
Regarding the decision, Hyundai Motor said: "We have to respond better to the various challenges arising from the continued supply and demand mismatch in semiconductors. We are on track to secure more liquidity."
The announcement came after major carmakers Renault Group, Skoda and Ford decided to pause operations at their European factories as the chip shortage continues to impact car production.
"The semiconductor shortage will continue in the fourth quarter and we expect it will have a lasting impact through next year. However, in the fourth quarter, we are seeing some positive signs such as extended production dates from the third quarter," Hyundai said, adding it was in talks with major chip companies as new sources for semiconductors. Chief of global operations Jose Munoz said earlier that the automaker wanted to develop its own chips.
In the first nine months of the year, Hyundai Motor sold 94,000 electric vehicles (EVs), up 40 percent year-on-year. Meanwhile, Hyundai said it didn't have any battery sourcing issues. "We will try to keep the battery supply chain working via LG Energy Solution's battery plant, which will go online in 2023," it told investors.
Hyundai Motor reported a net profit of 1.3 trillion won for the third quarter, compared to last year when it reported a loss of 336 billion won after being hit hard by one-time charges related to engine quality issues and a massive recall.
