Hyundai in $3.2bn drive to mass produce green cars and cut factory emissions

Hyundai Motor Group said it will spend 4.1 trillion won ($3.2bn, £2.8bn) to develop environmentally-friendly vehicles and reduce carbon emissions from its factories.

The South Korean automaker yesterday announced an investment plan aimed at making Hyundai one of the world’s four largest manufacturers of green cars.

The company will spend 2.2 trillion won to develop hybrid and hydrogen fuel cell vehicles, while 1.4 trillion won will go towards improving the fuel efficiency of engines and transmissions.

Hyundai, which plans to establish a mass production system for green vehicles by 2012, will also spend 500bn won to reduce carbon emissions by its factories by six per cent.

The company earlier this month launched the Elantra, its first hybrid car, although it is currently only available in South Korea. A global roll-out of the model is expected by next year.

As the world’s fifth-largest carmaker, Hyundai is in danger of losing out to Japanese rivals Toyota and Honda in the growing market for hybrids and other green vehicles.

Hyundai’s green initiative, which would help ignite production of its eco-friendly cars, may be eligible for tax breaks and loan guarantees under South Korea’s $85bn investment scheme for environmentally sustainable industries.

Another possible beneficiary of the government scheme is Samsung Electronics, which earlier this week announced plans to invest $4.3bn to develop more energy-efficient products and lower the greenhouse gas output from its manufacturing plants.