[Click eStock] "Hyundai Motor Ready for the Future, Solid Roadmap Until 2025"

Transition to a Smart Mobility Solutions Company Covering Electric and Autonomous Vehicles
Operating Profit Margin Expected to Remain Low for the Time Being Due to Won Appreciation and Emerging Market Demand Recovery Pace

Provided by Hyundai Motor Company

[Asia Economy Reporter Minwoo Lee] Hyundai Motor Company is analyzed to be ahead of its competitors in responding to technological changes. It is evaluated that the company has clearly presented roadmaps for electric vehicles, Urban Air Mobility (UAM), autonomous driving, and hydrogen energy.

On the 11th, Samsung Securities gave Hyundai Motor a 'Buy' investment rating with a target price of 191,500 KRW. Although the operating profit margin forecasts for 2021 and 2022 were lowered from the previous 7% to 4-5% and 5.5% respectively, this was based on the judgment that the solid fundamental strengthening was presented through such roadmaps.

The day before, Hyundai Motor held a 'CEO Investor Day' online and disclosed its future strategies. The core content was to transform from an automobile manufacturer to a smart mobility solutions company by providing key future businesses such as electric vehicles, Urban Air Mobility (UAM), autonomous driving, fuel cells, and innovative mobility solutions. To this end, it plans to invest 60.1 trillion KRW by 2025, secure an 8% operating profit margin in the automobile sector, and achieve a 5% global market share.

In the electric vehicle sector, Hyundai plans to invest about 10.8 trillion KRW (previously 9.8 trillion KRW) by 2025 and increase sales volume to 560,000 units. By 2040, it aims to launch all models as electric vehicles in Europe, China, the United States, and other markets, achieving an 8-10% market share and ranking among the top three globally.

Regarding autonomous driving, Hyundai plans to introduce Level 3 technology in the G90 vehicle in 2022. From 2023 onwards, Level 3 technology will also be introduced in electric vehicle models. According to the classification by the Society of Automotive Engineers (SAE), Level 3 autonomous driving means the vehicle's autonomous driving function becomes the primary driver. Passengers only need to take control in emergency situations and can operate smartphones or watch TV without watching the road. Currently marketed Level 1-2 systems are driver assistance levels such as speed control or automatic braking, requiring constant driver supervision.

In 2024, Hyundai plans to commercialize robotaxis with Level 4 or higher in cooperation with Motional. Level 4 means the vehicle can handle all driving, including emergencies. Unlike Tesla, which installs high-performance processors and updates software on all models, Hyundai's strategy is to equip all models with Advanced Driver Assistance Systems (ADAS) and offer optional convenience features (selling high-level autonomous driving according to consumer choice).

However, the short-term operating profit outlook has been lowered. The market consensus for 2021 operating profit is about 6.8 trillion KRW, with an expected operating profit margin of 5.9%. Samsung Securities analyst Eum Young Lim explained, "Assuming automobile sector sales of 85 trillion KRW, operating profit is estimated between 3.4 trillion KRW and 4.3 trillion KRW, and considering financial and other segments' operating profit of 1.8 trillion KRW, there is a gap of 700 billion KRW to 1.6 trillion KRW. The cause of the conservative guidance is the rapid appreciation of the Korean won and the slow recovery of demand in emerging markets. The 2022 operating profit margin forecast is also expected to drop from 7% to 5.5%."

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