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Will Hyundai Motor Pursue Hybrids or Electric Cars?

Posted November. 19, 2009 09:30,   


Hyundai Motor seems undecided over whether to continue developing hybrid vehicles after introducing the compact Avante LPI Hybrid this year.

Hyundai has announced a plan to develop electric vehicles in the wake of the government’s plan to roll out such cars from 2011.

A source at Korea’s top automaker said the company is internally undecided over whether to continue hybrid development or shift gears toward electric vehicles like the Renault Group of France. Hyundai has invested heavily in the hybrid sector.

Certain voices at Hyundai’s vehicle development division say the automaker must develop hydrogen fuel-cell vehicles as the ultimate model for an eco-friendly vehicle over the long term. Hyundai’s indecision over its direction has the carmaker’s suppliers perplexed as well.

Parts makers usually must adjust their production facilities when a new model is developed, a process that could take up to a year. If suppliers do not prepare themselves in tune with Hyundai’s direction for new vehicle development, they could face trouble.

Apart from automakers, experts are also mixed over the development of eco-friendly vehicles. This month’s issue of the journal of the Korea Automobile Manufacturers Association contains conflicting arguments on this issue.

Kim Ki-chan, a business professor at Catholic University in Seoul and the head of the Korea Academy of Motor Industry, said, “The vehicles that will become the standard (for eco-friendly) vehicles will be determined by the market, not technology.

“If so, the U.S. and China, which are leading the global auto market, will effectively pick electric vehicles as standard eco-friendly cars.”

As for hybrid vehicles, Toyota Motor has monopolized more than 80 percent of patents for the sector’s technologies. If automakers in other countries belatedly enter the segment, they will have no choice but to outsource the required technology from Toyota, Kim said.

Yoo Ji-woo, a business professor at Kookmin University in Seoul, also published his article “Development of Electric Vehicles and a Marathon” in the same journal. “The fate of electric vehicles will depend on the pace of oil price hikes, government cooperation, and changes in consumer behavior. These factors are beyond the control of automakers.”

“The government must put priority on the development of hybrids rather than electric vehicles.”