South Korean Companies Fall Short On investing in Research and Development
kpopluv, Jan. 29, 2015, 10:06 a.m.
Korean carmakers are lagging behind competitors in terms of research and development, while Chinese companies are catching up as they aim to compete in the ever-changing market.
German carmaker Volkswagen took the top spot by spending 11.7 billion euros in R&D in 2013, according to a report recently released by the European Commission. Next came Toyota, Daimler (the manufacturer of Mercedes-Benz), GM and BMW. Hyundai including its affiliates Kia and Hyundai Mobis placed 12th at 2.06 billion euros.
China's leading carmaker Shanghai Automotive Industry Corp. invested about 700 million euros in 2013, almost equal to Kia's 740 million euros. Only 13 Chinese companies were among the top 2,500 in 2012, but that number increased to 22 a year later. Their total R&D spending reached 2.12 billion euros in 2013, similar to the 2.24 billion euros spent by six Korean companies.
"Hyundai and Kia recently announced massive spending plans, but declining operating profits might make them difficult to deliver," said Lee Hang-gu, a researcher at the Korea Institute for Industrial Economics and Trade.