Hyundai Genuine Embarks on Business Restructuring: "Aiming for 10 Trillion KRW in Sales by 2025 to Enter Global Top 5"

[Asia Economy Reporter Jeong Hyunjin] Hyundai Genuine, the intermediate holding company of Hyundai Heavy Industries Group's construction machinery division, announced on the 25th that it has set a goal to achieve sales of 10 trillion KRW by 2025 and enter the top 5 global companies, and has begun business restructuring.

On the same day, Hyundai Genuine held its first integrated IR conference since its launch and announced specific promotion plans to maximize synergy among its business companies such as Hyundai Construction Equipment and Doosan Infracore. The business restructuring consists of three major parts: ▲ acquisition of the industrial vehicle business by Hyundai Genuine ▲ acquisition of shares in overseas production subsidiaries of Hyundai Construction Equipment ▲ implementation of a capital reduction without compensation and a paid-in capital increase for Doosan Infracore.

Hyundai Genuine plans to strengthen its business competitiveness by acquiring the industrial vehicle business producing forklifts and others from Hyundai Construction Equipment in December, making direct investments and fostering the business.

Hyundai Construction Equipment plans to improve profitability by acquiring overseas construction equipment subsidiaries in China and Brazil owned by Korea Shipbuilding & Offshore Engineering and conducting strategic sales and production tailored to local markets. In addition, it will secure competitiveness by absorbing and merging Hyundai Core Motion's A/S division and reinvesting profits from parts sales.

Doosan Infracore, incorporated into Hyundai Heavy Industries Group, will improve its financial structure through a capital reduction without compensation and a paid-in capital increase. First, at an extraordinary general meeting of shareholders, it will resolve a 5-to-1 par value reduction capital reduction method that does not directly affect shareholder value such as net assets and the number of issued shares. Subsequently, it plans to promote a paid-in capital increase of up to 800 billion KRW within the year. The funds raised through the paid-in capital increase will be invested in acquiring a 20% stake in DICC, repaying borrowings, digital transformation (DT), eco-friendly technologies, and future technology development for growth.

Hyundai Genuine also announced a vision according to the synergy creation plan among business companies on the same day. As an intermediate holding company controlling both companies, Hyundai Genuine set a goal to enter the top 5 global companies by achieving sales of 10 trillion KRW and a global market share of 5% by 2025 by selecting areas where short- and long-term synergies can be generated.

First, in the short term, Hyundai Genuine will select about 240 items that Hyundai Construction Equipment and Doosan Infracore can jointly purchase to improve profitability. In the mid- to long-term, the two companies will maximize synergy through complementary sales of products in which each has strengths. By 2025, they will efficiently utilize R&D personnel from both companies to develop integrated platforms such as excavators and wheel loaders to strengthen technological competitiveness.

In particular, Hyundai Genuine plans to promote the development of hydrogen engines for construction equipment in connection with the hydrogen business being promoted by Hyundai Heavy Industries Group, and will actively pursue mergers and acquisitions (M&A), startup investments, and industry-academic cooperation to secure future technologies such as autonomy and electrification in advance.

Hyundai Genuine President Cho Young-chul said, "We will continue to seek the optimal ways to maximize the synergy of the three companies going forward."

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