Kia 2003 Annual Report Download - page 27

2003 Annual Report 27
Consolidation of R&D Resources at Namyang R&D Center -Improved
Development Efficiency and Synergy Effect
In May 2003, Kia and Hyundai’s various R&D centers in Ulsan, Namyang and Sohari were consolidated
into one centralized research and development hub. The Namyang Research and Development Center
has become the heart of automobile research and development in Korea. Situated on a 3,465,000m2site,
the Center boasts a full range of equipment and a broad pool of manpower, offering the means to carry
out all phases of automobile development, from body design, engineering design, testing and power
train development, basic research, electronics research and a pilot production center. The new facility will
greatly increase development efficiency and generate synergy.
Design and Technical Center Inaugurated in North America
Hyndai and Kia Motors have announcee the inauguration of the Hyundai/Kia Motors Design & Technical
Center in Irvine, California. The construction initiated in November 2001 has been completed, resulting in
a compound over an area spanning 29,200m2with a total floor area of 8,250m2. The state-of-the-art,
2-story R&D center is a platform for researching concept cars and adjusting vehicles already in mass-
production to better satisfy local market requirements. The Center conducts a broad range of research on
both Kia and Hyundai models, and the two companies will certainly benefit from the synergy created in
such a collaborative environment. Some 100 Korean and American automobile designers, engineers, and
prototype and model markers will work at this Center.
M assive Proving Ground under Construction in the US
The construction of a 17,160,000m2proving ground is underway in California’s Mohave Desert.
Scheduled for completion in late May, 2004, the US$50 million facility will be equipped with a four lane
tracks 10.4km long, a parking facility of nearly 200,000m2and an onsite R&D center. This proving ground
and test site, will to serve as a strategic developmental launchpad for the North-American operation for
both Kia and Hyundai. It will conduct performance and durability tests on Hyundai and Kia cars and their
locally developed automotive components.
KRW1.4 Trillion Earmarked for Investment in 2004
Kia Motors plans to invest KRW1.428 trillion, or about 9% of total sales revenue, in 2004. The budget
will cover stepped up R&D on new models, the cost for building or expanding engine and transmission
plants, and remodeling of the Gwangju plant. Meanwhile, the market debut of Cerato in late 2003 will
be followed by other models to be successively launched in 2004. In January 2004, the Bongo III(Light
Cargo Truck), built around an environment-friendly engine, was launched in response to stiffening
environmental regulations, and in February, the Morning, a next-generation, lightweight export model
was launched. Second half launches include the KM, a new-concept SUV, and the JB, the successor to
the Rio, providing additiional opportunities to expand domestic and overseas sales.
▶The J-2.9 common-rail diesel engine equipped
with turbocharger inter-cooler.
▶▶ Kia researchers are testing performance and
steadily improving quality so that the company can
rank among the world’s top five in terms of quality
by 2010.
■R&D
■PP&E
∙ Increased R&D investments for
new car development
∙ Building and expanding engine &
transmission production facilities
∙ PP&E investment for rationalizing
& remodeling of Gwangju plant
CAPEX Trend
(Korean Won in billions)
623
214
409
760
234
526
1,425
413
1,012
01 02 03
CAPEX Trend
(of Revenue)
5.6%
6.3%
11.1%
01 02 03