By Ryu Jin
Staff Reporter
South Korean automakers are expected to begin mass production of hybrid cars from 2011. But they would have to invest a great deal more over in the coming years to compete with their Japanese rivals, according to a state-run think tank.
Dr. Cho Cheol, a researcher at the Korea Institute for Industrial Economics and Trade (KIET), said in a report last week that South Korean carmakers could churn out hybrid vehicles as early as 2011, a bit later than estimates presented by industry sources.
``Despite local carmakers' endeavors to industrialize the hybrid cars as early as possible, we are witnessing some problems such as the profitability compared with unit cost,'' he said. ``So, the mass production is unlikely until the year 2010.''
Once South Korean automakers begin mass production in earnest, he added, the annual production of hybrid cars could increase to about 500,000 units by 2015 and 1.8 million units in 2020.
``By the year 2020, the annual production would reach 1.8 million units, some 70 percent of which would be exported to the overseas markets,'' he said. ``It means that the South Korean players would take up about a 10-percent share in the global hybrid car market.''
Hybrid cars use two or more distinct power or fuel systems. Hybrid electric vehicles, for example, run on both gasoline and electricity, while consuming much less gasoline than conventional cars equipped with internal combustion engines fueled by gasoline or diesel.
Global leaders in the industry have already put much effort in past decades to develop advanced technology since the hybrid vehicles, which emit less harmful exhaust gas than conventional cars, are regarded as not only more fuel-efficient but eco-friendly.
South Korean players have also been bracing themselves for the coming era of energy deficiency. Hyundai Motor, the frontrunner, has set up a plan to begin mass production in 2009 and bring up its annual line to 300,000 units per year by 2015.
Hyundai Motor, which first unveiled its hybrid concept cars FGV1 and FGV2 in 1995 and 1999, has already brought the accumulated technologies into several of its models such as ``Avante'' and ``Verna'' in 1999 and 2000, respectively.
``Click'' hybrid mini car, which the company developed three years ago, is a soft hybrid vehicle that improved the fuel efficiency of the previous gasoline engine-equipped Click by 50 percent. Since it was presented to the Ministry of Environment, it is now road-tested.
Still, leading the pack in the hybrid car industry are the Japanese, who dominate 96 percent of the U.S. market. Toyota began selling its hybrid car RX400h in South Korea last year and Honda also introduced its Civic Hybrid to the local market early this year.
Cho, the KIET researcher, said in the report that South Korea's technology level could reach 70-75 percent of Japan by 2010 and 90-95 percent by 2020, up from the current 60-65 percent.
But he stressed that the South Korean automakers should increase their investment in the research and development (R&D) activities drastically to catch up with their global rivals.
Hyundai Motor and its affiliate Kia Motors set up some 2.57 trillion won ($2.78 billion) for this year's R&D activities, just one-fourth of Toyota's. Honda also announced the largest-ever investment for development of eco-friendly vehicles early this year.