Despite Semiconductor Shortage, Aggressive New Car Launches... Jeong Eui-seon's 'Contrarian' Strategy Worked

Targeting Post-COVID Market Recovery
Hyundai Launches 9 New Models Including Staria, Casper, Sportage; Kia Introduces 4
Shaping Market Landscape This Year

Addressing Prolonged Semiconductor Shortage Through Parts and Inventory Optimization
Chairman Chung's 'Risk Management' Also Effective

[Asia Economy Reporter Ki-min Lee] The fact that Hyundai Motor Group has risen to become the world's third-largest automaker in the global automotive market carries significance beyond being a mere 'first.' Since taking office as chairman in October last year, Chairman Chung Eui-sun, who has proclaimed himself a 'game changer,' has successfully implemented strategies on the world stage, transforming Hyundai Motor Group into an icon of innovation. Notably, the group overcame the challenges posed by the COVID-19 pandemic and parts supply shortages through aggressive new car launches and efficient semiconductor parts management strategies.

◆ The game changer keyword: diverse ‘new cars’ = According to Hyundai Motor Group and industry sources on the 2nd, Hyundai Motor and Kia saw domestic sales from January to September this year decrease to 540,842 units (a 7.3% decline compared to the same period last year) and 403,348 units (a 2.8% decline), respectively, but sales in key regions such as the United States and Europe rose by 20-30% compared to the same period last year.

First, Hyundai Motor and Kia sold 383,429 units and 387,716 units, respectively, in Europe?the birthplace of automobiles?from January to September this year, marking increases of 24.2% and 24.5% compared to the same period last year. In particular, their market share in automobile sales ranked third overall at 11.1% during the same period, following Volkswagen at 21.3% and Stellantis at 18.4%. Renault Group accounted for 9.9%, BMW 7%, and Toyota 6.8%. In the United States, the largest automobile market, Hyundai Motor sold 619,955 units, a 36.3% increase year-on-year, while Kia sold 555,525 units, up 29.7%, achieving record-high sales.

Since early this year, Hyundai Motor and Kia have been actively launching new vehicles in preparation for the recovering automotive market post-COVID-19, changing the dynamics of the automotive market. Hyundai Motor released the Staria, Casper, i20N, Bayon, Santa Cruz, Alcazar, and Genesis brand models including the G80e, GV60, and G70 Shooting Brake this year. Kia also introduced the K8, The New K3, The New K9, and Sportage. Notably, the dedicated electric vehicles Ioniq 5 and EV6, which began sales in April and August respectively, sold 50,589 units by the end of September. Particularly, the EV6 has a backlog of 24,000 units waiting in Europe.

Chairman Chung, who inherited the management philosophy of ‘quality management’ from his father, Honorary Chairman Chung Mong-koo, has significantly improved the design, driving performance, and convenience features of all models, creating a virtuous cycle that has increased Hyundai Motor’s sales volume. The Ioniq 5 and EV6 were recently selected as the 2022 German Car of the Year (GCOTY) in the ‘New Energy’ and ‘Premium’ categories, respectively. The Genesis GV70 was also named Car of the Year by an American automotive media outlet. An industry insider said, "Vehicles that previously required various promotions to sell in the U.S. and Europe are now increasing sales even at full price."

◆ Chairman Chung, the semiconductor supply crisis solver = Furthermore, despite the prolonged semiconductor supply shortage since the end of last year, Hyundai Motor Group has prevented production declines by optimizing parts and inventory efficiency. Due to the prolonged shortage of automotive semiconductors from the end of last year to the present, GM Group and the Renault-Nissan Alliance, which were previously ranked 3rd and 4th, saw sales drop by 3-5% compared to last year, which was directly impacted by COVID-19. This is a result of Chairman Chung personally overseeing semiconductor and parts strategies.

In particular, Chairman Chung visited Hyundai Motor’s U.S. sales corporation in Los Angeles and the Alabama Hyundai factory in mid-last month to review production status and check next year’s strategies amid semiconductor supply uncertainties. Under his directive, Hyundai Motor and Kia have shared semiconductor and parts supply status daily and weekly with parts affiliates and partners throughout this year, adjusting parts inventory through parts sharing among different models and minus options.

Chairman Chung plans to continuously expand sales by increasing Hyundai Motor Group’s eco-friendly vehicle lineup and reducing uncertainties through direct investments in autonomous driving, batteries, and semiconductors. He is also personally managing business strategies in the Southeast Asian market, which has high growth potential in the automotive sector. Hyundai Motor Group is building an electric vehicle battery factory in Indonesia in partnership with LG Energy Solution, and last month, Chairman Chung met with Indonesian President Joko Widodo to present Hyundai Motor Group’s future vision and cooperation plans.

Professor Kim Pil-su of Daelim University’s Department of Automotive Engineering said, "During the one year since Chairman Chung took office, Hyundai Motor Group has transformed from a fast follower to a first mover by pursuing convergence management in automobiles, UAM, and robotics. Even just looking at vehicles, quality and design have greatly improved, making it a company that customers cannot help but seek out."

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