Hyundai Motor Accelerates 'Smart Mobility' with Jeong Eui-seon Style Innovation Momentum

Strengthening Leadership in Future Business Areas like Electrification and Autonomous Driving
Improving Global Car Profitability and Corporate Governance Restructuring Remain Challenges

Hyundai Motor Group Vice Chairman Chung Euisun is delivering a New Year's address at the 2020 Hyundai Motor Group Kick-off Ceremony held at Hyundai Motor Company headquarters in Seocho-gu, Seoul, on the 2nd. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Ji-hee] Chung Mong-koo, Chairman of Hyundai Motor Group (pictured), stepped down from his position as chairman of Hyundai Motor's board of directors, a role he had maintained since 1999, which has placed greater responsibility on Chung Eui-sun, the Executive Vice Chairman. This is because, amid the global automotive market's slowed growth, he must not only maintain profitability but also prepare for the restructuring of future industrial frameworks, while also filling the void left by Chairman Chung stepping back from major decision-making.

For now, the industry consensus is that there will be no major disruption since Executive Vice Chairman Chung has been overseeing Hyundai Motor's key issues since last year. Chairman Chung, who is 82 years old this year, has not practically participated in management since 2018, including not attending board meetings. The process of handing over the reins of Hyundai Motor Group to Executive Vice Chairman Chung has already progressed significantly. After being promoted to Executive Vice Chairman in September 2018, he took on the roles of CEO of Hyundai Motor and Hyundai Mobis at last year's general meeting of shareholders, leading group management.

With the general meeting marking the official start of the 'Chung Eui-sun era,' the future mobility innovations under his leadership are expected to gain momentum. Last year, Hyundai Motor Group declared its transformation into a 'smart mobility solutions company' and is focusing on strengthening leadership in future business areas such as electrification, autonomous driving, and mobility services, as well as improving the company's structure.

Hyundai Motor announced its mid-to-long-term innovation plan, the '2025 Strategy,' in December last year, revealing plans to invest 61.1 trillion KRW by 2025 to strengthen competitiveness in existing businesses and secure capabilities in future businesses. Of this, 20 trillion KRW will be allocated to securing future technology capabilities such as electrification, autonomous driving, and artificial intelligence. Kia Motors has also set a plan called 'Plan S,' aiming to invest a total of 29 trillion KRW during the same period to boldly transition to electric vehicles and mobility solutions.

At this general meeting, Hyundai Motor amended its articles of incorporation to add 'various vehicle charging businesses including electrified vehicles and other related businesses' to its business objectives. The existing clause, 'manufacturing and sales of various vehicles and their parts,' was revised to 'manufacturing and sales of various vehicles and other means of transportation and their parts.' Hyundai Motor CEO Lee Won-hee stated in his greeting at the general meeting, "We will take this year as the starting point for executing the 2025 Strategy and strive to secure leadership in future markets."

On the 19th, the 52nd Annual General Meeting of Shareholders was held at Hyundai Motor Company's headquarters in Yangjae-dong, Seoul. (Photo by Hyundai Motor)

An industry insider said, "The reason Executive Vice Chairman Chung retained his inside director positions at Hyundai Motor, Kia Motors, and Hyundai Mobis but relinquished his inside director position at Hyundai Steel seems to be his determination to strengthen future automotive competitiveness," adding, "Chung Eui-sun's innovation to transform Hyundai Motor Group into a smart mobility solutions company will gain momentum." One of his major mid-to-long-term tasks is the corporate governance restructuring, which was attempted but failed in 2018.

Since Elliott, which was the most active in opposing the corporate governance restructuring at the time, has reportedly sold all its shares and withdrawn from Hyundai Motor Group, it is expected that Hyundai Motor Group will accelerate the restructuring process. However, given the previous failure and recent challenges such as the sharp stock price decline due to the COVID-19 pandemic, there are still many obstacles. Executive Vice Chairman Chung is also known to be approaching the corporate governance restructuring cautiously, so it is anticipated that it may take more time.

There are also urgent tasks at hand. How well the group overcomes the massive adverse impact of the COVID-19 pandemic on the global market is emerging as the first test of leadership for Executive Vice Chairman Chung as the group's top leader. In fact, at this general meeting, a shareholder expressed concern, saying, "The management environment is expected to worsen due to the COVID-19 situation." The key issue is how much damage can be recovered after the situation stabilizes, given the inevitable sales contraction in major automotive markets.

It is expected that if Hyundai Motor's labor and management agree on overtime and special work to quickly restore production, the extent of the damage can be reduced. CEO Lee said, "Despite the difficult environment this year, we will expand sales through successful new car launches and focus on improving profitability by differentiating sales strategies according to regional management environments," adding, "We plan to respond to the uncertain management environment by expanding the Completely Knocked Down (CKD) business to secure new markets."

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