Hyundai Motor Group, South Korea's dominant automotive conglomerate, said Thursday its roll-out of mass-produced hybrid cars would be delayed by at least three years to 2009 because of problems with profitability.
Hyundai Motor Group, whose chairman Chung Mong-koo was indicted on Tuesday for alleged embezzlement in a slush fund scandal, had planned to begin selling mass-market hybrid cars by the end of this year.
Since 2004, Hyundai Motor Group has sold less than 400 hybrid cars to government agencies, such as the Ministry of Environment, by revamping its gasoline-powered compact cars such as the Click and the Verna.
Hyundai Motor Group may be feeling pressure from producing hybrid cars, which run on both an internal combustion engine and an electric motor, with high costs, industry observers say.
Whether the cars are commercially viable or not, the delay in the hybrid roll-out is seen as the latest setback from the absence of the 68-year-old chairman, who has a reputation as a micromanager.
Chung, who has been in custody since April 28, was indicted on charges of misappropriating about 100 billion won (US$106 million) in company funds to bribe government officials for business favors and causing 400 billion won in damages to the auto conglomerate.
On Monday, Hyundai Motor Co., the group's flagship and the nation's top automaker, said it will "indefinitely" postpone initial construction work on its planned automotive plant in the Czech Republic.
Despite the indefinite delay in construction, Hyundai Motor said it will sign a formal contract later on Thursday to set up the 1 billion euro plant with high-ranking officials from the Czech government, but without an official ceremony.
The agreement is to be signed at 5:00 p.m. at the automaker's headquarters in Seoul by the Czech Republic's Industry and Trade Minister Milan Urban and Hyundai Motor Vice Chairman Kim Dong-jin, the company said.
On Friday, the board of Hyundai Motor approved an initial investment plan worth 743 million euros for the Czech plant, which will eventually have an annual production capacity of 300,000 cars by late 2008. Seoul, May 18 (Yonhap News)
Hyundai Motor Group braces for 3-year delay in hybrid |
