South Korea’s second-biggest steelmaker Hyundai Steel Co will develop new automotive products for use in cars including the Sonata and Elantra by adding about 200 researchers, increasing competition for POSCO.Mr Cho Won Suk senior executive vice president of Hyundai Steel Co said that the steelmaker wants to make lighter, stronger and easy to shape sheets for Hyundai Motor Co and Kia Motors Corp.Nomura International Ltd said that Hyundai Steel, spending KRW 6.2 trillion (USD 5 billion) on two plants, is competing with bigger rival Posco in South Korea’s automotive market as sales soar for the nation’s largest carmakers. The challenge is to compete on quality after the expansion.
Mr Lee Jin Woo who helps manage USD 8.8 billion at KTB Asset Management Co said that “Auto steel requires the best technology among steel products and not everyone can enter the market. It will take time, but Hyundai Steel will be able to go up to that level. POSCO cannot help but to be hit one way or another.”
Hyundai Steel sold 700,000 tonnes of automotive steel, or 7 percent of total sales, last year and may increase that for 2010.
Mr Cho said that the steelmaker will spend 80 billion won on product development over the next 12 months, and expand its research department by up to 67% in two to three years.