South Korea's Hyundai Motor will spend nearly $1.8 billion by 2020 on a big offensive in commercial vehicles, like entering the race in the U.S., in order to catch up with rival automakers in a growing global market.
The No. 5 automaker in the world, when paired with sister company Kia Motors, has had its sights set on the commercial vehicle market for a while now, as it sees the market growing nearly 30 percent in each of the next five years.
Another reason Hyundai is targeting the U.S. is due to the lack of interest in China. Last year, commercial vehicle sales fell at home, in China and everywhere else, according to Reuters.
In order to expand, Hyundai will invest nearly 400 billion won ($363.13 million) in order to raise production of trucks, buses and vans in Korea by 2020. The company has set a side 1.6 trillion won for research and development in vehicles by the end of the decade.
The automaker said in a company statement on Monday that it will introduce "premium models in North America and Europe," though Hyundai didn't provide a time frame or any additional details.
Hyundai lost share in the overall vehicle market in 2014 in the U.S., mainly due to fuel-guzzling pickup trucks and SUVs, two segments that surged in popularity as oil prices dropped.
The U.S. is Hyundai's the second-biggest overseas market, after China.
"Hyundai and Kia need to bolster their weak commercial vehicle business to reach an annual production capacity of 10 million vehicles, from about 8 million currently," said analyst Suh Sung-moon at Korea Investment & Securities, according to Reuters.
On Monday, Hyundai said it will increase annual production capacity at its factory in the southwestern Korean city of Jeonju by 54 percent to 100,000 commercial vehicles by 2020, from 65,000 vehicles.
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