Hyundai Mobis to Spin Off Production Division into Subsidiary to Focus on Future New Businesses

[Asia Economy Reporter Yoo Hyun-seok] Hyundai Mobis is establishing a separate subsidiary by separating its manufacturing (production) division to accelerate its transformation into a future mobility company.

On the 18th, Hyundai Mobis announced that it will establish two integrated production specialized affiliates responsible for module (component assembly) and parts manufacturing. After the establishment of the corporations, Hyundai Mobis will hold 100% of the subsidiary shares.

The domestic module factories and core parts factories, which had been operated through production specialized partners, will be integrated into two production specialized integrated affiliates respectively. Previously, Hyundai Mobis’ module and parts manufacturing business divisions outsourced parts production through partners.

The production organizations of module factories in Ulsan, Hwaseong, and Gwangju will be reorganized into a module integrated affiliate (tentative name), and the production organizations of core parts factories producing airbags, lamps, brakes, steering, and electrification devices will be reorganized into a parts integrated affiliate (tentative name).

Regarding the establishment of the subsidiaries, Hyundai Mobis stated, "Separating the future mobility division and manufacturing division will enhance each division’s expertise and maximize efficiency. Through selection and concentration, it will be possible to build a flexible and agile management environment and proactively respond to the rapidly changing mobility paradigm."

Even after establishing the integrated affiliates, Hyundai Mobis’ business structure divided into electronics, modules, electrification, and lamps will not change. This is because only the production, which previously relied on external production specialized partners, has been transferred to subsidiaries and integrated.

Hyundai Mobis will maintain tasks such as research and development (R&D), raw material procurement, and quality control of modules and core parts. The integrated affiliates, operated as independent management entities, will be responsible for equipment and personnel operation related to production and focus on internalizing manufacturing technology. Hyundai Mobis will build a business model focused on securing core future mobility technologies, product development, and mass production.

The integrated affiliates plan to expand independent sales capabilities in the future and, through cooperation with global production bases, undertake contract manufacturing of platform and system-level parts for global customers. Hyundai Mobis explained that it will realize economies of scale as an independent company with expertise in integrated operation of major domestic production bases.

As global competitors are making large-scale investments centered on core technologies such as semiconductors and software, Hyundai Mobis also plans to accelerate structural improvement and portfolio reorganization through this manufacturing division separation.

Hyundai Mobis recently explained the manufacturing division separation along with plans to strengthen future vehicle competitiveness to its employees. The agenda for establishing the new corporation is scheduled to be approved at a special board meeting in September. Accordingly, the integrated affiliates are expected to officially launch in November. A Hyundai Mobis official said, "Investments in future mobility such as autonomous driving and electrification, as well as the shareholder return policy announced earlier this year, will be maintained. Since the subsidiaries are affiliates wholly owned by Hyundai Mobis, there will be no changes in consolidated sales and operating profit."

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