Hyundai Mobis CEO Lee Gyuseok: "Increasing Non-Affiliated Orders to 40%... Aiming to Become a Global Top 3 Parts Supplier"

Hyundai Mobis 2024 CEO Investor Day
Targeting 40% Non-Affiliate Sales Ratio by 2033
3-Year Average Annual Sales Growth 8%, Operating Profit Margin 5-6%
EREV Mass Production Targeted for 2026... Developing Small EV Drive System

"We will raise the proportion of non-affiliate sales to 40% by 2033 and leap forward as a global top 3 parts supplier."

On the 19th, Lee Gyu-seok, CEO (President) of Hyundai Mobis, announced this goal at the '2024 CEO Investor Day' held at the Fairmont Hotel in Yeouido, Seoul. The event was an opportunity for CEO Lee to directly introduce Hyundai Mobis's mid- to long-term growth strategy to investors. This is the first time Hyundai Mobis has held an Investor Day hosted by the CEO.

On this day, Hyundai Mobis presented mid- to long-term targets to raise the average annual sales growth rate to 8% and the operating profit margin to 5-6% by 2027. Last year, Hyundai Mobis's sales growth rate was 14%, and the operating profit margin was about 3.8%. While continuing external growth through sales expansion, the goal is now to focus on qualitative growth to improve profitability.

CEO Lee emphasized, "Although we experienced a temporary stagnation in profitability due to proactive investments to leap forward as a global top player, it is now time to achieve qualitative growth based on profitability, focusing on high value-added core parts."

To this end, he presented a blueprint to increase the proportion of non-affiliate sales, currently at about 10%, to 40% by 2033. Along with business growth, shareholder value enhancement will also be pursued. The current TSR (Total Shareholder Return) of about 20% will be expanded to over 30% in the next three years. At the same time, he added plans to retire treasury shares held over three years. TSR refers to the total return rate shareholders can obtain over a certain period, considering cash dividends, share buybacks, and retirements.

Hyundai Mobis President Lee Gyu-seok is presenting the business direction and strategy as a speaker at the '2024 CEO Investor Day' held on the 19th at the Fairmont Hotel in Yeouido. Photo by Hyundai Mobis

The reason Hyundai Mobis can boldly declare that it will increase the proportion of non-affiliate supply sales to 40% by 2033 is due to confidence gained from securing future mobility technologies such as electrification and electronic components businesses. In particular, it is focusing on developing technologies that can respond to the future mobility trend of 'SDV (Software-Defined Vehicle) based on electrified vehicles.'

First, in the electrification field, the plan is to proactively release parts that meet market demands, such as extended-range electric vehicles (EREV) and entry-level electric vehicle drive systems. Hyundai Mobis is developing its own design specifications, including drive systems, aligned with Hyundai Motor Group's EREV strategy targeting mass production by the end of 2026, and is currently preparing for design verification and evaluation. Hyundai Mobis believes that once Hyundai Motor and Kia's EREV vehicles are launched and recognized in the market, the parts supplier's technological capabilities will naturally be promoted, leading to increased orders from global automakers.

Additionally, a parts supply strategy for 'entry-level electric vehicles' is being prepared to overcome the electric vehicle chasm (temporary demand stagnation before mass adoption). Currently, the main electric vehicle drive system in the market is 160 kW class. Hyundai Mobis plans to develop a 120 kW class drive system by next year, reducing the price to about 70% of the existing system, and will target markets centered on small electric vehicles such as Europe and India.

A vehicle equipped with the next-generation driving system 'In-Wheel System' developed by Hyundai Mobis. Provided by Hyundai Mobis

At the same time, development of drive systems for large electric vehicles will be pursued to expand the portfolio. Hyundai Mobis announced that the development of a 250 kW class electric vehicle drive system has entered the final stages, and it is actively pursuing orders from premium automakers.

In the electronic components field, the focus is on providing total solutions such as integrated control platforms and integrated infotainment (IVI) systems that enable flexible responses to SDVs. Hyundai Mobis is developing next-generation infotainment innovation technologies, including displays, sound, and IVI integrated controllers. Simultaneously, through collaboration with North American electric vehicle companies, Hyundai Mobis has completed the concept development of its first SDV software platform, 'Vision Link.'

In the chassis field, the lineup of systems replacing mechanical devices with electrical signals, such as Electronic Mechanical Braking (EMB) and Steer-by-Wire (SBW), will be strengthened. CEO Lee also set a goal to achieve a 10% global market share in chassis safety by 2030. In the automotive semiconductor field, the plan is to focus on fabless (semiconductor design) centered independent design capabilities to improve system control quality and secure a stable supply chain.

CEO Lee stated, "We will reorganize the product lineup around high value-added products and establish a step-by-step profitability management system to maximize cost competitiveness. While focusing on technology acquisition and market share expansion in growth new businesses, we will secure stable profits through stabilization businesses to build a foundation for sustainable growth."

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