Hyundai Motor Group 2020 Opening Ceremony… Chung Euisun "This Year Marks the First Year to Secure Leadership in Future Vehicles"

Operation of 44 Electric Vehicles by 2025
Promotion of Autonomous Vehicle Commercialization in 2023
"Must Have an Open Mind Like Startup Entrepreneurs," Urges Employees
Fundamental Business Structure Improvement Including Cost Innovation
Best Efforts to Maximize Customer Satisfaction and Shareholder Value

[Asia Economy Reporter Su-yeon Woo] Hyundai Motor Group held its 2020 New Year's meeting on the 2nd at the main auditorium of its headquarters in Yangjae-dong, Seoul, delivering a message that this year will be the starting point for securing leadership in future markets. On this day, Hyundai Motor Group introduced mobile real-time live streaming to allow employees to freely participate and communicate.

In his New Year's message, Vice Chairman Chung Eui-sun stated, "Hyundai Motor Group aims to make 2020 the first year to secure leadership in future markets." He also set the goal of becoming a game changer leading the market landscape and strongly expressed his determination to achieve visible results in future fields this year.

The message from Vice Chairman Chung at this year's New Year's meeting is clear. It contains the intention to establish concrete and clear mid- to long-term goals and execution plans as milestones for visible future achievements and to ensure their implementation together with the group’s employees.

Vice Chairman Chung said, "If all employees unite and continuously innovate technology, business, and organizational capabilities, I am confident that we will wisely overcome difficult environments and challenges and become a company more trusted by customers," emphasizing goals of technological innovation, business foundation innovation, organizational culture innovation, and customer-first priorities. He also expressed his intention to visualize future market leadership in electrification, autonomous driving, and mobility services, and to continue improving the overall business structure. At the same time, he urged creative thinking and challenging execution like that of a 'startup entrepreneur.'

Along with innovation based on automobiles, the message also included plans to actively promote new technology development and business in broad areas such as robotics, urban air mobility based on PAV (Personal Air Vehicle), and smart cities, providing human-centered smart mobility solutions.

Chung Eui-sun, Executive Vice Chairman of Hyundai Motor Group

◆ Operating 44 Electrified Vehicles by 2025... Visualizing Future Market Leadership= Regarding Hyundai Motor Group’s direction for technological innovation, Vice Chairman Chung began by saying, "With the development of technology and networks, the imagined future is becoming reality, and such changes are accelerating in the automotive industry." The group’s technological innovation direction is summarized as solidifying leadership in the electrification market, leading the expansion of the hydrogen industry ecosystem, commercializing autonomous vehicles, and gradually expanding the mobility service business.

Vice Chairman Chung said, "To firmly establish leadership in the electrification market, we plan to operate a total of 44 electrified vehicles by 2025, including 11 dedicated electric vehicle models, based on the development of dedicated platforms and strengthening the competitiveness of core electrification components."

Having sold 24 electrified vehicle models last year, Hyundai Motor Group will expand to a total of 44 models by 2025, including 13 hybrid models, 6 plug-in hybrids, 23 electric vehicles, and 2 hydrogen fuel cell vehicles. In particular, electric vehicles will increase from 9 models in 2019 to 23 models in 2025, starting with the launch of dedicated models in early 2021. A new electric vehicle architecture (vehicle basic framework) development system will also be introduced and applied for the first time to models released in 2024.

In 2019, Hyundai Motor Group signed a supply agreement for hydrogen fuel cell systems for the North American commercial vehicle market with Cummins, a global leader in engines and generators based in the U.S. This year, Hyundai Motor Group will begin exports to the U.S. through system supply to Cummins and expand to Europe and other regions. In the future, hydrogen fuel cell systems will be supplied to finished vehicle manufacturers, ships, railways, forklifts, and power generation and storage sectors, aiming to sell about 200,000 hydrogen fuel cell systems annually domestically and internationally by 2030. At the same time, a production system capable of manufacturing 500,000 hydrogen fuel cell vehicles annually will be established domestically.

Regarding autonomous driving, Hyundai Motor Group plans to secure technology through a joint venture with Aptiv in the U.S. and promote commercialization development in 2023. After developing an autonomous driving platform in 2022, limited operation in certain areas will be conducted in 2023, with full-scale mass production targeted for the second half of 2024. Vice Chairman Chung introduced the mobility sector by saying, "We will establish corporations in major regions such as the U.S., Europe, and Asia, and begin full-scale business execution from this year, expanding step by step."

In the U.S., through the mobility service corporation MoceanLab established in Los Angeles (LA) at the end of 2019, car-sharing business in Los Angeles will be intensified this year. In Russia, the vehicle subscription service 'Hyundai Mobility,' introduced in Moscow last year, will be implemented in major regions and the scale of vehicle models will be increased.

Along with innovation based on automobiles, new technology development and business will also be actively promoted in areas such as robotics, urban air mobility based on PAV (Personal Air Vehicle), and smart cities. In particular, PAV will be integrated with service platforms and developed into an UAM (Urban Air Mobility) business. To this end, Hyundai Motor Group established a UAM business division last year.

◆ Fundamental Cost Innovation through New Technologies and Overall Business Structure Improvement= Business foundation innovation was also mentioned as a key message to be emphasized this year. Vice Chairman Chung said, "We will eliminate unnecessary waste elements and promote more fundamental cost innovation activities through new ideas and technology development."

By developing a new electric vehicle architecture system, the cost structure of electric vehicles will be innovated through parts standardization and multi-model application, and lineup efficiency will be improved to increase volume and profitability per model. Sales network optimization and new sales methods will be introduced, and flexible global production systems tailored to market demand will be secured.

Regarding the finished vehicle business, he emphasized, "Based on regional responsibility management, a profitability-centered business operation system must be established, and the headquarters division should actively support this." Hyundai Motor Group established a global regional headquarters system last year, strengthening autonomous and responsible management by region. The plan is to enhance business competitiveness and secure future business execution capabilities centered on regional headquarters, thereby strengthening profitability and laying the foundation for future businesses.

◆ Pursuing Creative Thinking Like a 'Startup Entrepreneur'= Regarding organizational culture innovation, Vice Chairman Chung urged, "I hope each and every one of you will have the mindset of a startup entrepreneur, not just as a simple member of a large organization, and engage in creative thinking and challenging execution."

He added, "I will lead by example to expand horizontal communication with you and establish an organizational culture where diverse personalities and capabilities harmonize," emphasizing, "We must create various synergies through active communication and cooperation not only within the group but also externally."

Since last year, Hyundai Motor Group has been promoting organizational culture and system improvements to create an autonomous and horizontal culture centered on work by expanding 'autonomy' and 'opportunities.' Autonomy has been greatly expanded through flexible working hours and liberalization of dress code and lunch breaks. Approval stamps have been eliminated, non-face-to-face reporting via email has been expanded, and a flexible seating system is being piloted in some areas.

New personnel systems such as reducing and integrating rank and title systems are also being implemented. The general employee rank system has been reduced to four levels, and titles have been simplified to 'Manager' and 'Senior Manager.' The promotion seniority system has been abolished to provide a foundation for talented individuals with capabilities and expertise to grow early.

◆ Best Efforts to Maximize Customer Satisfaction and Shareholder Value= Vice Chairman Chung once again emphasized 'customers' in his New Year's message. He said, "More important than the company's growth is the happiness of customers who use our products and services," and stated, "Our corporate activities must start from customers, and we must create new value together with customers."

He added, "We will listen carefully to the voices of various stakeholders, including investors, and actively reflect them in management activities to maximize shareholder value." Hyundai Motor Company held 'CEO Investor Day' twice in 2019, inviting domestic and international institutional investors and analysts. At the 'CEO Investor Day' held last December, Hyundai announced its mid- to long-term innovation plan, the '2025 Strategy.' Vice Chairman Chung also actively communicated with key stakeholders in customers and capital markets through talks invited by Carlyle.

Finally, Vice Chairman Chung urged, "I hope you will do your best to make 2020 a year of vigorous progress, taking it as a new starting point with pride and a sense of mission that we lead future growth."

This content was produced with the assistance of AI translation services.