Shares in Kia Corp. and South Korean automotive parts makers rose sharply on Wednesday, following a news report that Apple Inc. will make an initial investment of 4 trillion won ($3.6 billion) in the Korean carmaker Kia to produce self-driving electric cars from 2024.
Both Apple and Kia have been in working-level talks since last month and are set to sign an agreement on the project later this month, DongA.com, a Korean online news media, reported on Feb. 3.
Under the upcoming deal, Kia will manufacture Apple cars at its US plant in Georgia. The 4 trillion won injection from Apple will be used for the development and construction of the relevant production facilities.
In the first years of their partnership, Kia will churn out 100,000 units of their jointly developed EVs, and increase annual production to 400,000 units. Chung Eui-sun, chairman of Hyundai Motor Group, Kia’s parent company, is scheduled to attend the signing ceremony, according to the report.
Hyundai neither denied nor confirmed the report.
Shares in Kia leapt by 9.65% to close at 97,700 won in heavy trade on Feb. 3, versus the benchmark Kospi’s gain of 1.06%. Earlier in the day, Kia shares shot to their 13-month high of 102,000 won.
Hyundai Glovis Co. shares were up 5.46% to end at 212,500 won, as the report said that the logistics arm will play a meaningful role in the Apple Car project, utilizing its US operations.
The report came a day after TF Securities’ analyst Ming-Chi Kuo said in his research note that Apple will collaborate with Hyundai on its first Apple Car model.
Kuo, known as a reliable source for Apple-related rumors, reportedly said Hyundai Mobis will be in charge of design and production for some Apple Car components, and Hyundai Group affiliate Kia will provide the US production line for Apple Cars. He added that Apple's first vehicle chassis would likely be based on Hyundai's E-GMP electric car-only platform.
Last December, Hyundai Motor
unveiled the Electric-Global Modular Platform (E-GMP) designed exclusively for battery EVs, saying it will serve as the core technology for the group’s next-generation EV lineup.
Hyundai Motor Group’s
push for new growth businesses – ranging from EVs, hydrogen fuel cell cars and future mobility platforms to flying cars – could appeal to Apple as well, according to the report.
Last month,
Hyundai Motor was said to be in the early stages of discussions with Apple Inc. to jointly develop and produce self-driving EVs, sending its shares as much as 25% higher to an eight-year peak of 257,000 won on Jan. 8. On Wednesday, Hyundai Motor shares climbed 2.08% to finish at 245,500 won.
Under its comprehensive mid- to long-term strategy, Hyundai aims to supply 8-10% of the world’s EVs by 2025. The group plans to introduce more than 12 battery-powered electric cars built on E-GMP.
AUTO PARTS MAKERS RALLYAuto parts makers also reacted positively to the Apple-Kia partnership report. Mando Corp jumped 11.31% to 79,700 won, with Hyundai Mobis up 3.89% to 347,500 won.
In particular, small-cap automotive stocks were heavily traded. Dongwon Metal Co. soared by 12.61% to 1,340 won, becoming the most actively traded stock on the country's main bourse during the day. Hwashin Co. spiked 24.17% to 5,960 won.
There are concerns that the EV business tie-up with Apple could downgrade Hyundai Motor Group's image as one of subcontractors, undermining efforts to boost its own EV lineups. But the consensus view is that the Apple Car project will help the Korean automotive group take a leading role in the future mobility business.
Meanwhile, Kia plans to unveil personalized vehicles based on a dedicated PBV platform from 2024 at the earliest, and such vehicles are set to reach 1 million units in 2030 alongside its global auto sales target of 4 million units that year,
Chief Executive Song Ho-sung told The Korea Economic Daily in a recent interview.
Write to Jae-won Park at
wonderful@hankyung.comYeonhee Kim edited this article.
