Hyundai, GM, Mazda Bet on Eco Cars

April 3, 2009

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Hyundai Motor Group and General Motors Corp. are placing their bets on eco-friendly cars despite a sharp industry downturn. Hyundai recently announced it will go ahead with plans to develop eco-friendly cars, and GM has requested $2.6 billion in additional government loans to support the development of three new hybrid vehicles, reports Reuters.

If GM receives the additional funds, it would raise to $10.3 billion the aid it has received towards more fuel-efficient vehicles.

Hyundai-Kia Automotive Group (HKAG), which includes Hyundai Motor Co. and Kia Motors Corp., said it would overcome current economic difficulties by maintaining last year’s investment levels, which includes the development of eco-friendly cars and completing the construction of an integrated steel mill.

HKAG expects that demand for fuel-efficient and eco-friendly cars will rapidly rise when the global economy recovers. As a result, HKAG will invest a total of about 9 trillion won in 2009, similar to last year’s levels. In addition, HKAG will invest 2.4 trillion won into the development of eco-friendly cars in phases and expand the R&D workforce to as many as 1,000 in the future.

Hyundai Motor Group typically allocates 5 percent of sales for R&D and spends 20-30 percent of that budget on environment-friendly models such as hybrid cars, Yang Woong-chul, president of Hyundai’s auto research & development division, told Reuters.

Hyundai plans to start mass production of hybrid cars next year and to begin mass production of plug-in hybrids in late 2012. The group will launch its first small hybrid car this year, starting with Hyundai Motor’s Elantra LPI Hybrid in July with plans to add mid-sized sedans to the offering. Other targets include the production of 30,000 hybrid vehicles by 2010 and commercialization of fuel cell electric vehicles (FCEV) by 2012.

GM is also moving ahead with its eco-friendly car development. GM’s third loan request, under a U.S. Energy Department program designed to support the development of fuel-efficient vehicles, will help the company develop two spinoffs from its all-electric Chevrolet Volt, reported Reuters.

This was the first time GM has confirmed that it intended to move ahead with production of variants of the Volt, a battery-powered car with a small 1.4-liter engine, according to Reuters. The Volt is scheduled to go into production in late 2010.

In January, GM revealed a concept version of a Converj Cadillac, which was based on the electric-drive system the automaker developed for the Volt. GM plans to use the Volt system in other models to raise volume and bring down the cost of the lithium-ion batteries used in the vehicles, according to Reuters.

The White House-appointed auto task force is giving GM 60 days to pull together a restructuring plan that cuts costs and debt levels more sharply than the automaker anticipated, reported Reuters.

Other auto makers are also adding green aspects to their cars. As an example, Mazda recently announced it is using a car seat fabric made from 100 percent of BIOFRONT, a green bioplastic produced almost entirely from plant-based feedstock. Co-developed with Teijin Fibers Ltd. , the BIOFRONT seats will be used in the Mazda Premacy Hydrogen RE hybrid vehicle.

Mazda also recently claimed the world’s first automated bumper recycling for end-of-life vehicles. The car maker also plans to increase the fuel efficiency of its vehicles by 30 percent through new engine technology and lighter materials by 2015.

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