The Korea Herald


Hyundai Motor chair marks 3rd year of record earnings

World’s top 3 carmaker faces pressure to take bigger leap in futuristic mobility market

By Byun Hye-jin

Published : Oct. 10, 2023 - 16:02

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(Park Ji-young/The Korea Herald) (Park Ji-young/The Korea Herald)

Hyundai Motor Group is expected to post record earnings this year, breaking its own record for the third year in a row since Executive Chair Chung Euisun took the helm of the world's third largest carmaker in 2020.

Hyundai and its smaller affiliate Kia are projected to post 260.8 trillion won ($192.5 billion) and 26.6 trillion won in sales and operating profits this year, according to estimates by market tracker FnGuide. Both figures stand at an all-time high.

Since Chung took up leadership, the auto giant’s yearly revenue surged 37 percent to 229.9 trillion won as of last year, while operating profits doubled to 17.5 trillion won during the same period. Last year, the carmaker also won the No. 3 title in the global automotive market, selling 6.85 million vehicles.

In the January-September period this year, it sold over 5.48 million vehicles, an 8 percent jump from a year ago. Its premium Genesis brand, in particular, hit the 1 million mark in global sales, a feat for the carmaker that had long been considered a quality, budget car brand.

Industry watchers agree that Hyundai’s stellar performance is the outcome of Chung’s aggressive business strategy to diversify its product lineup, ranging from cost-effective cars to value-added futuristic models. Chung is especially credited with leading the launch of the Genesis brand in 2015, recruiting top designers from Bentley.

Under the ambitious goal to sell over 2 million electric cars worldwide by 2030, Chung has more recently made a big push for clean mobility. Although Hyundai and Kia cars became ineligible to receive EV subsidies following Washington’s Inflation Reduction Act, the carmaker expanded the electric car lease business to secure footing in the all-important US market. It also vowed to speed up the construction of an EV manufacturing plant in Georgia within the next year.

In the third quarter, Hyundai and Kia’s eco-friendly cars, including hybrid and battery-powered car sales in the US, skyrocketed 93 percent and 95.4 percent to a record-high of 46,794 units and 33,305 units, respectively.

Bold investments in future technology show Chung’s commitment to making Hyundai Motor Group a prime mover in mobility innovation. Under a 1-trillion-won deal, the auto giant acquired American robotics company Boston Dynamics in June 2021. Last year, it invested a total of 1.45 trillion won and added a new subsidiary called 42dot, an autonomous vehicle startup in Korea, in a move to boost its software-defined vehicle business.

But Hyundai chairman’s push to defend the world’s top 3 title is not without challenges. The company said it needs a breakthrough in the Chinese business that has been dwindling ever since 2017, a year after when China started to take retaliatory measures against Korea for its decision to deploy a US-made missile defense system.

Of the five production bases in China, Hyundai has either sold or plans to sell off three manufacturing plants in Beijing, Chongqing and Changzhou. After improving the production efficiency of the remaining two plants, it looks to focus on manufacturing profitable Genesis cars and SUVs.

“We also plan to roll out cost-competitive and high-quality electric cars in China, one of the largest EV markets and restore our reputation there,” said the company official.

Improving corporate culture is another pressing issue for the company as it seeks to welcome new ideas and boost work performance. The chairman stressed in his New Year's message that he will make efforts to overhaul the status quo and build a progressive and flexible working environment.

“Compared to his father Chung Mong-koo (the honorary chairman), Chung has shown a more open (style of) leadership by joining hands with automotive software and chip companies to adapt to the fast-evolving mobility market,” said Kim Pil-su, a car engineering professor at Daelim University. “He has expanded Hyundai’s global presence with internal combustion engine cars and the Genesis brand, and is creating a strong foothold as the first mover in the EV market.”