• Executive Vice Chairman Chung announces Hyundai Motor Group (HMG)’s 2020 business direction in a New Year’s address
• EVC Chung emphasizes innovations in technology, business, corporate culture and customer-centered mindset
• “The evolution of mobility has offered people quality time, as well as happiness and joy,” says EVC Chung
• EVC Chung’s New Year remarks include:
◦ HMG to enhance leadership in vehicle electrification, autonomous driving and mobility services
◦ HMG to operate 44 electrified models by 2025 including 11 BEV models
◦ HMG to commercialize autonomous driving technology by 2023
◦ HMG to offer human-centered smart mobility solutions and pursue new businesses
◦ HMG to invest more than KRW100 trillion over next 5 years; KRW20 trillion annually
◦ HMG to improve business competitiveness via cost innovations with new ideas and technologies
◦ EVC emphasizes nurturing a creative mindset like a startup entrepreneur and applying it in businesses
◦ HMG to prioritize customers amid its pursuit of change and to maximize shareholder value
◦ “The happiness of customers remains the core value and true asset of our Group,” says Chung
SEOUL, January 2, 2020 – Hyundai Motor Group (the Group) today held its 2020 New Year ceremony at its headquarters in Seoul, outlining its innovation priorities and strategic direction to engineer sustainable growth as a “game changer” in diverse industries.
“Hyundai Motor Group enters 2020 as the inaugural year for securing its future industrial leadership,” said Euisun Chung, Executive Vice Chairman (EVC) of Hyundai Motor Group.
In the 2019 New Year’s address, Chung highlighted the Group’s key objective as “taking a leap as a game changer capable of setting the rules of the market.” The objective has served as a guiding principle for the Group’s comprehensive transformation covering everything from large-scale investments and partnerships to micro-level operations, as effectively carried out throughout 2019.
Building on these improvements, Chung indicated Hyundai’s strong desire to produce tangible results in future business areas starting from 2020.
The EVC’s message in this year’s speech is clear. It contains the Group’s strong resolve to draw up a concrete mid- to long-term plan for tomorrow’s material results, as well as a timeline for its implementation in collaboration with all employees.
“If we all work together in unison and continue to innovate our technological, business and organizational capabilities, I am confident we will become the Hyundai Motor Group capable of overcoming its challenging environment, and is even more trusted by our customers,” underscored Chung.
In particular, Chung expounded the Group’s objectives for this year and beyond as achieving innovations in technology, business, corporate culture and customer prioritization.
He shed light on the Group’s commitment to continuing its leadership in future industries such as electrification, autonomous driving and mobility services, as well as its efforts to enhance the quality of its business operations in all sectors. To realize that, he urged all employees to adopt a “creative mindset” and “enterprising will” like that of a startup entrepreneur.
“I want to re-emphasize that the ultimate beneficiaries of all our efforts at transforming and innovating Hyundai Motor Group should be our customers. Their satisfaction and happiness in using our products and services remain the core value and true asset of our Group,” he noted.
Chung shared his thoughts on the essential meaning of Hyundai Motor Group’s business operations. “The evolution of mobility has offered people quality time, as well as happiness and joy.”
Also included in the 2020 New Year’s message was the plan to actively pursue new technologies and projects that can provide human-centered smart mobility solutions in a wide range of areas, including robotics, Urban Air Mobility (UAM) based on the use Personal Air Vehicles (PAV) and smart city solutions, all of which would progress alongside automobile-based innovations.
With regard to Hyundai Motor Group’s open innovation strategy that embraces collaboration and partnership with global players in diverse industries worldwide, the EVC said, “We will push for open innovation that accommodates diverse capabilities outside the company. We will go anywhere there are the new technology, vision and talent to support our innovation drive.”
Hyundai Motor Group’s New Year’s meeting was broadcast online and via a mobile channel in real time, allowing all employees to participate in an open, communicable manner.
Securing future industrial leadership
“In recent years, due to the rapid development in technology and networks, what had only been imagined is becoming an everyday reality, and this trend is accelerating in the automotive industry,” Chung said of the direction of the Group’s technological innovation.
The plan focuses on securing Hyundai’s leadership in the vehicle electrification, expansion of hydrogen industry ecosystem and self-driving commercialization, as well as the progressive expansion of its mobility services businesses.
“To consolidate our leadership in vehicle electrification, we plan to operate 44 electrified models by 2025, including 11 dedicated BEV models, by bolstering the development of EV platforms and core components,” he explained.
The Group’s electrified lineup, which comprised 24 models in 2019, will be expanded to 44 models by 2025, including 13 hybrids, six plug-in hybrids, 23 battery electric vehicles and two fuel- cell electric vehicles.
In particular, the BEV lineup will increase to 23 models by 2025 from last year’s nine models, with the first dedicated BEV model to be launched in 2021. A new EV architecture development system will be introduced and applied to models slated for launch in 2024.
This year, the Group will further bolster the sales of electrified models, adding hybrid and plug-in hybrid variants to its best-selling SUV models, including Hyundai Tucson and Hyundai Santa Fe.
“In particular, in our fuel-cell electric vehicle business, where we boast the world’s top technological competitiveness, we will hit our stride by providing fuel-cell systems to customers not only in the automotive industry but also in other sectors,” he pointed out. “Furthermore, we will add momentum to expanding the hydrogen ecosystem and its infrastructure by cooperating with partners around the world.”
In 2019, the Group signed an agreement with Cummins Inc., a global leader in the engine and generator fields, to jointly develop and commercialize electric and fuel-cell powertrains combining Hyundai’s fuel-cell system and Cummins’ electric powertrain, battery and control technologies. The Group will start exporting its fuel-cell systems to Cummins and enter the U.S. market this year, followed by the European market.
In the future, the Group plans to supply fuel-cell systems to the transport sector -- covering vehicles, vessels, railcars and forklifts -- and power-generation sector -- covering electricity production and storage -- thereby delivering some 200,000 fuel-cell systems per year around the world by 2030. The Group will simultaneously establish a 500,000 units-per-year capacity for FCEV production in Korea.
The Group will strengthen its cooperation with partners in Korea such as Hydrogen Energy Network (HyNet), as well as partners overseas including Saudi Aramco, to expand the supply of hydrogen and charging stations. In addition, the Group will broaden its strategic collaboration with related enterprises around the world to set up hydrogen infrastructures.
“In the autonomous driving industry which is the core of future vehicles development, we will attain the world’s top safety and technological innovation competitiveness through our U.S.-based venture to be jointly established with Aptiv, targeting the commercialization of the technology in 2023,” said Chung.
The Group aims to accelerate the development of the autonomous driving software technology and commercialize self-driving vehicles with SAE Level 4 and Level 5 technology in the near future to lead the industry.
After developing an autonomous driving platform by 2022, the Group will operate autonomous vehicles in select regions in 2023, and lead to commercial productions by the second half of 2024.
“In the rapidly expanding mobility services industry, including ride-sharing and hailing, we will establish overseas corporations in major regions such as the U.S., Europe and Asia, begin business operations in full swing this year, and expand them gradually,” said the EVC.
Hyundai Motor Group will kick-start its car-sharing business in full swing in Los Angeles this year through its mobility service company MoceanLab, which was established in LA last year. The car-sharing service allows people to freely rent and return cars in the city of LA. In major regions of Russia, the Group this year will expand the lineup of offered vehicles for its vehicle subscription service first unveiled in Moscow last year.
The Group will expand collaboration with mobility platform companies it has strategically invested in, such as Grab and Ola. In India, it will launch new mobility services in collaboration with Ola, and in Southeast Asia, offer EV car hailing services by expanding the supply to the region’s largest car-hailing firm, Grab. The Group supplied 200 units of Hyundai Kona Electric SUVs to Grab last year for its car-hailing service in Singapore, and will expand the coverage to major Southeast Asian countries such as Indonesia this year.
The EVC also said the Group will develop new technologies and businesses such as robotics, UAM based on PAVs and smart city development alongside automobile-based innovations.
Hyundai Motor Company recently revealed images of its future mobility solutions via connection of the PAV, Purpose Built Vehicle (PBV) and Hub, the last of which is a take-off and landing platform for PAVs and point of arrival and departure for PBVs, as well as a site for communal activities. These concepts, as part of Hyundai Motor Company’s human-centered mobility vision, will be presented at the CES 2020.
Hyundai Motor Company created ‘Human-Centered City Advisory Group’ and is undertaking various discussions on the future city aimed at enabling the creation of new human-centered values. It is also running a project that researches the future city’s policy and structural transformation by 2050.
The total planned group-wide investments for the future growth over the next five years is KRW100 trillion (approximately USD 87 billion), with the annual investment amounting to KRW20 trillion, a figure significantly expanded from the current level.
“We plan to eliminate all unessential and uneconomical elements in our Group, and pursue cost innovations by supporting new ideas and technological developments,” said Chung, emphasizing business innovation.
Through a new EV architecture development system, Hyundai Motor Group will innovate its cost structure for electric vehicles by sharing components in their application to various models. It will also increase profitability and volume of each model through lineup optimization. It will streamline operation networks and introduce new sales methods, while securing a flexible production system that can respond to the fluctuating global demand.
Particularly in the automobile sector, Chung stressed the need to “establish a profit-oriented management system based on a regionally accountable management, with the headquarters supporting it.”
Hyundai Motor Group established a regional headquarters system around the world in 2019, and strengthened each regional headquarters’ autonomous and accountable management. The idea is to bolster each region’s profitability and future business foundation by enhancing the headquarters’ business competitiveness and securing the execution capability of its future business.
“We will optimize our Group’s business portfolio by efficiently allocating each affiliate’s capabilities and resources, and steadily support the process of innovating our value chains,” he added.
Innovation of corporate culture
“The thrust behind our leadership in future industries must come from within, from each and every one of ourselves,” Chung asked employees to “not to think of yourself as a member of a vast organization, but as a startup entrepreneur, who constantly seeks challenges using a creative mindset,” said Chung, underscoring the need for innovating the corporate culture.
“In order to make this happen, I will lead by example and communicate more with all of you, helping establish an organizational culture where the diverse personalities and capabilities of all individuals are harmonized,” he added.
Since 2019, Hyundai Motor Group has begun improving its corporate culture and system. To nurture an autonomous and collaborative culture centered on work, the Group has expanded the autonomy and opportunity available to all employees. The aim is to accelerate the innovation of employees’ ways of thinking and working.
Hyundai Motor Group is operating a new human resources management system targeting the reduction and consolidation of ranks and titles.
The Town Hall Meeting, in which employees communicate with one another on diverse topics, has been actively running, and recently the EVC participated in a session under the theme of “Creating change together,” openly conversing with employees.
“Our customers’ satisfaction and happiness in using our products and services are more important than our own growth,” he stressed. “That will be the core value and true asset of our Group,” Chung underlined prioritizing customers once again.
He also pointed out that “our business activities must start from considering our customers first, and continue to create new values together with our customers.”
The EVC, at a meeting with investors of Carlyle Group last year, responded to a question about Hyundai Motor Group’s strategic priority, saying it lies in the service of its customers. He emphasized the Group’s renewed focus on its customers and customer-oriented decision-making.
“We need to develop a deeper understanding of our customer base, including the millennial generation that is taking the lead in our new age,” said Chung.
Hyundai Motor Group is making various efforts to understand its millennial-generation customers and spread understanding between generations within the organization.
“We will maximize shareholder value by listening to the voices of diverse stakeholders, including investors and will actively incorporate them into our management activities,” Chung added.
Hyundai Motor Company ran the CEO Investor Day twice last year by inviting institutional investors and analysts from Korea and abroad. At the CEO Investor Day in December, the company announced its Strategy 2025 roadmap which includes its mid- to long-term innovation plan. The EVC has communicated actively with investors and capital market participants on various occasions including the Carlyle Group meeting.
In closing this year’s address, he expressed gratitude to all employees past and present as well as people from partner firms for their tireless efforts at enabling the Group’s progress over the years,
“I ask you to do your best to make 2020 the year when we press ahead vigorously, tapping our confidence that we forge the future’s growth.”