The executives leading these initiatives, in interviews with Automotive News, describe today’s Hyundai Motor Group as a mature, waking giant that used its downtime to regroup and is poised to build on its rank as the world’s No. 5 automaker.
“Every organization needs a break before it goes for another jump,” said Ahn Byung-ki, director of eco-vehicle development. “A lot of people inside feel that way. I’m ready for the next jump.”
The trifecta bet underscores the outsized ambition of a company that traces its roots to just 1967, has scant racing heritage and only developed its first proprietary engine in 1991. Indeed, the stakes are high for the entire auto group, including Hyundai and Kia, as the new ventures devour valuable resources at a time when Hyundai Motor is sliding into a fourth year of falling profits.
The transformation also adds strain as speculation swirls about the transfer of corporate control from Chung Mong-koo, the Hyundai-Kia group’s 78-year-old patriarch and chairman, to his 45-year-old son, Vice Chairman Chung Eui-sun.
Sagging profits are a reason to push into more profitable segments, but also a limitation. Operating income dropped 1.5 percent in 2013, 9.2 percent in 2014, 16 percent in 2015 and was down 7 percent through the first half of this year.
Hyundai hasn’t put a figure on the new programs. But investments will likely run into the billions of dollars, said James Chao, IHS Automotive’s managing director for the Asia-Pacific region.
“It’s not only a question of raw dollars, it’s a question of consistency over the long term, in terms of consistent brand message, technology improvement as well as investment levels,” Chao said. “Not only do they need to lead in terms of technology, efficiency and luxury, the consumers must recognize this. This is the biggest challenge.”
By any estimate, Hyundai’s sheer number of entries in new segments is dazzling.
The global blitz began this year with the launch of the first sedans from Genesis, the flagship G90 and the G80, as well as the debut of the Ioniq line of electrified vehicles meant to wrest the green-car mantle from Japanese rival Toyota Motor Corp. The rollout gathers speed next year with the release of Hyundai’s first N performance vehicle. Then comes a next-generation hydrogen fuel cell vehicle in 2018.
That’s just for starters.
Hyundai Motor Group plans to introduce 28 eco-vehicles by 2020 across the Hyundai, Genesis and Kia brands. The expansion will cover 10 traditional hybrids, eight plug-in hybrids, eight electric vehicles and two fuel cell vehicles.
During the same time frame, the company also plans to introduce the Genesis G70 sedan, a coupe and two crossovers. And next year, the first entry from the N performance subbrand arrives, a souped-up variant of the next-generation Elantra targeting European customers. Another offering for the U.S. will follow, and then comes a third N for a global audience.
“It’s a huge undertaking,” said Vice Chairman Yang Woong-chul, the group’s global head of r&d. “But we feel like we can do it.”
That confidence is partly due to the pause that Yang helped orchestrate.