Hyundai will invest 10.5 trillion won ($8.5 billion) in 2023 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 the U.S., the automaker said.
The 2023 investment compares with a spend of around 8.5 trillion won in 2022.
The company on Thursday increased dividends in an unusual move for the automaker, after operating profit more than doubled in the October-December quarter.
“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, he said.
Hyundai 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.
Hyundai said it expects to have solid back order demand in major car markets and forecast robust growth in electric vehicle sales, including in the U.S. where regulatory concerns have clouded its outlook.
The company is targeting a 54 percent jump in EV sales in 2023 to 330,000 globally and said it wants its U.S. electric car sales to climb 150 percent to 73,000 to account for 9 percent of its U.S. vehicle sales.
It expects a 9.6 percent jump in overall North American vehicle sales and a 21 percent surge in China vehicle sales.
Sales in North America rose 21 percent in the last quarter, while volume slumped 19 percent in China and Europe sales were little changed.