A new report out of South Korea suggests that the Hyundai automotive group is considering outsourcing production of some of its vehicles in a bid to cut costs and free up resources to develop new technologies.

According to Automotive News, Hyundai has already conducted the requisite due diligence on an investment in a contract manufacturing project proposed by the South Korean city of Gwangju.

"Even though the investment is confirmed, we are considering outsourcing and securing supplies of an economical new car by investing in a non-controlling stake without participating in the management of the new corporation," Hyundai said in a statement, according to the report.

An earlier report from the Joonang Ilbo daily newspaper suggested that the city of Gwangju's government was planning on completing the plant, which would apparently boast an annual production capacity of around 100 000 units, by 2020 at the very earliest. It added that Hyundai’s investment would likely give it a 20 percent stake in the project.

As the Automotive News report points out, automakers such as BMW, Mercedes-Benz and Jaguar outsource the production of some of their products, with Magna Steyr in Austria assembling vehicles such as the 5 Series, G-Class and E-Pace.