TOKYO -- Hyundai and Kia are setting up new regional headquarters organizations in North America and Europe in an effort to move decision making closer to the markets and react more quickly to changing trends and customer demand.
The changes take effect for both brands July 2 and are the first steps in a global reorganization that will be rolled out to other regions, the South Korean carmakers said June 18 in separate news releases. Hyundai Motor Co. and Kia Motors Corp. are partners in the Hyundai Motor Group.
Under the new setup, each region will be responsible for "every aspect of the business, ranging from product planning, marketing, sales, and manufacturing," the companies said.
Each regional headquarters will have divisions handing planning, finance, products and customer experience to "optimize more effective decision-making systems," they said.
The move mirrors similar efforts by competitors, including Toyota Motor Corp., Honda Motor Co. and Volkswagen AG, to delegate more independence and authority to regional operations.
As big automakers have grown into sprawling international juggernauts, handing decision-making power to executives closest to the customer is seen as a key weapon in slashing bureaucracy.
Hyundai and Kia said the reorganization will spur growth and innovation.
The change may also address a criticism often leveled against the South Korean carmakers: Their management is too top-down and stultifying of regional initiative.
The Hyundai Motor North America Headquarters will encompass Hyundai Motor Manufacturing Alabama, the company's production hub for the Americas and three sales units: Hyundai Motor America, Hyundai Motor Canada and Hyundai Motor Mexico.
Executive Vice President Lee Yong-woo will leave his current position as head of Hyundai Motor Brazil to oversee the newly established regional headquarters.
The Hyundai Motor Europe Headquarters will expand Hyundai Motor Europe's current role beyond sales, bringing under its wing Hyundai Motor Manufacturing Czech and Hyundai Assan Otomotiv Sanayi ve Ticaret, its manufacturing joint venture in Turkey.
Choi Dong-woo, currently head of the European operations division in Seoul, will take on the role as head of the new regional headquarters and be promoted to executive vice president.
The Kia Motors North America Headquarters will cover Kia Motors Manufacturing Georgia and Kia Motors Mexico, the company's production hubs for the Americas, and three sales units: Kia Motors America, Kia Motors Canada and Kia Motors Mexico, its local sales arm. The new regional headquarters will be led by Executive Vice President Rhim Byung-kwon.
Kia Motors Europe Headquarters will roll Kia Motors Slavaki into Kia Motors Europe's current role overseeing sales. Park Yong-kew, senior vice president for European operations at corporate headquarters, will be promoted to executive vice president to lead the unit.