The Hyundai Motor Group is getting younger. After the’Prince of the Prince’ in 2000, when the honorary chairman Chung Mong-koo, who became the world’s fifth largest automobile company, stepped down and his son, Eui-sun Eui-sun, was officially launched.
Under the regime of Chairman Eui-sun Eui-seon, Hyundai Motor Group is expected to show the market in a’definitely’ different form from the previous one. While serving as senior vice chairman, Chairman Eui-sun Eui-sun showed a different vision for the future of Hyundai Motor Group and a vision to be reborn as a’young’ corporate culture. As honorary chairman Chung Mong-koo withdrew from the front line of management at this year’s shareholders’ meeting, Chairman Eui-sun Eui and Hyundai Motor Group start a’fresh start’.
In fact, the regime of Chairman Eui-seon Eui-seon was predicted to some extent from two years ago. It is true that he took the lead in taking the lead in major management issues and mergers and acquisitions (M&As) after he became the group’s senior vice chairman in September 2018. Honorary Chairman Chung Mong-koo disappeared from the official statue and gave full power to his son.
Honorary Chairman Chung Mong-koo will also resign as a registered director at the Hyundai Mobis shareholders’ meeting to be held on the 24th. As a result, we will completely retire from the front line of management. Hyundai Motor Group recently requested the Fair Trade Commission to change the same person (total number). The same person means the actual ruler of the company. It is known that the FTC is struggling with the appointment of the same person in May.
As chairman Eui-seon Eui-seon system is in full swing, it is predicted that the restructuring of Hyundai Motor Group’s governance structure, which collapsed in 2018, will accelerate again. This is an essential task for securing stable management rights. In the case of Chairman Eui-sun Eui-sun, the percentage of ownership in major affiliates (Hyundai Motors 2.4%, Kia 1.7%) is low. It is inevitable to point out that they are exercising excessive management rights with a small stake.
Chairman Eui-seon Eui-seon’s succession of the shares of Honorary Chairman Chung Mong-koo (Hyundai Motor 5.3%, Hyundai Mobis 7.1%, Hyundai Glovis 6.7%, Hyundai Steel 11.8%, etc.) is also difficult. Honorary Chairman Chung Mong-koo’s stake exceeds 5 trillion won. We can’t help but care about inheritance and tax issues.
In the end, the role of Hyundai Glovis, with 23.3% of Chairman Eui-sun Eui-seon, will become important. In the market, various scenarios are discussed, such as the way Hyundai Glovis purchases shares of Hyundai Mobis of its affiliates, the merger between Hyundai Glovis and Hyundai Mobis, and conversion to a holding company.
For Chairman Eui-seon Eui-sun, it is also important to gain the trust of shareholders by demonstrating management capabilities. This is because the management performance of the honorary chairman Chung Mong-koo system is inevitably compared at the stage of the generation change.
Looking at the results of the Hyundai Motor Group over the past five years, it can be seen that the sales and operating profits surged in the first year, when Chairman Eui-sun Eui-sun was promoted to senior vice-chairman at the time. Hyundai Motor Group’s 2019 management performance was 27.2 trillion won in sales, an increase of about 6.8% compared to 254 trillion 796.6 billion won in the same period of the previous year. Operating profit also increased by about 23.2% to 10 trillion 2009 billion won, compared to 8,281.2 billion won in the same period of the previous year. In the case of last year, the global sales contraction due to the aftermath of Corona 19 and the factory shutdown were expected to lead to a sharp decline in performance, but it is evaluated as good.
Genesis, the premium brand of Hyundai Motor Group, is also the work of Chairman Eui-sun Eui-sun. In 2015, Hyundai Motor Company launched Genesis independently, preparing to enter the premium market. In particular, last year, it completed more than 100,000 units per year by completing a product line from sedans such as G70, G80, and GV80 to sports utility vehicles (SUVs). It has been four years since 2016 that Genesis overpowered Mercedes-Benz in Korea. This year, it will take its first step to the world stage such as Europe and China.
However, improving the profitability of Hyundai Motors, its flagship subsidiary, is a task to be solved. After recording sales of 93,649 billion won in 2016, Hyundai Motor Company showed a steady increase in sales until 2019, before Corona 19. However, operating profit decreased from 5,193.5 billion won in 2016 to 3,605.5 billion won in 2019. Last year, both sales and operating profit declined due to deteriorating market conditions. Chairman Eui-sun Eui-seon also recognized this. At a town hall meeting held on the 16th, he said, “It is true that profitability has not improved over the past 10 years.”
This year is more important than ever for Hyundai Motor Group. Recently, Chairman Eui-sun Eui is aggressive in investments to secure future mobility competitiveness in preparation for the 4th industrial era. Chairman Eui-sun Eui-sun emphasized in this year’s New Year message that “a year when a major transformation into a new growth engine should be achieved.”
Chairman Eui-sun Eui-seon announced that the future business of the group will be reorganized into 50% automobiles, 30% urban air mobility (UAM), and 20% robotics. At the CES held in the U.S. earlier last year, they partnered with Uber to show off the concept of a personal vehicle.
In March of the same year, it was decided to establish a joint corporation called Aptiv and Mocial, which are leading the autonomous driving sector. Motive recently received Level 4 certification in Nevada, raising expectations. Chairman Eui-sun Eui predicts that commercialization will be possible in 2023.
Chairman Eui-sun Eui-sun’s gaze is heading towards the future. This is why the first M&A that took place after being promoted to chairman was Boston Dynamics. To this end, a large amount of funds of 880 million dollars (KRW 960 billion) was poured. Chairman Eui-sun Eui-seon also acquired a 20% stake as an individual.
In line with eco-friendly policies, it will also focus on developing electric and hydrogen vehicles. The Hyundai Motor Group plans to actively utilize E-GMP, a platform exclusively developed for electric vehicles. In the case of Hyundai Motor Company, more than 12 electric vehicles will be introduced by 2025, including E-GMP-based electric vehicles and derivative electric vehicles.
Kia plans to launch 7 exclusive electric vehicles by 2026 and build a full lineup of 11 electric vehicles along with 4 derivative electric vehicles. In addition, the company plans to expand and preoccupy the electric vehicle ecosystem by actively working on battery and charging infrastructure.
This year, Hyundai Motor Company is releasing the first pure electric car Ioniq 5 based on E-GMP. The car, which was recently released to the public, will begin mass production in earnest from the end of this month. Kia’s EV6 and Genesis JW (development name) are also planned to be released in sequence within this year.
Last year, it occupied 70% of the global market and is also driving the hydrogen car-related business, which has a monopoly position. It plans to invest more than 11 trillion won by 2030 to lead the hydrogen ecosystem. In 2023, Hyundai’s first hydrogen electric vehicle, the Nexo successor, is also expected to be released.
It is also accelerating its targeting to the global market. The Hyundai Motor Group has already launched’Hyundai Hydrogen Mobility’ with H2 Energy, a Swiss hydrogen energy company in 2019. It is expected to supply a total of 1,600 hydrogen-electric heavy-duty trucks by 2025. Last year, it exported related systems to Swiss hydrogen storage technology company GRZ Technology and European energy solution startups. With the goal of the second half of 2022, a hydrogen fuel cell system production plant will also be built in China.
As Hyundai Motor Group’s constitution improvement is in full swing, the corporate culture is also changing. It is a transformation into a horizontal culture rather than an existing military culture. The recruitment of external talents such as foreigners is also becoming more active. The ability-oriented personnel system, regardless of age or gender, has also changed significantly from the Eui-Seon system.
In the future, Chairman Eui-sun Chung’s Hyundai Motor Group is expected to continue to change. Chairman Eui-sun Eui-sun said at the last town hall meeting, “In order to make the best judgment according to the situation, you must listen to the opinions of subordinates with various experiences.” “I do” he emphasized.
[CEO스코어데일리 / 이지완 기자 / [email protected]]
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