Aiming to Become a Smart Mobility Solution Provider
Hyundai Motor Co. will invest 61 trillion won by 2025 to accelerate its transformation into a smart mobility solution company. The automaker plans to reinforce its capabilities in the two pillars of its future business -- AI-based mobility products and services. It aims to begin volume production of personal air vehicles (PAVs) and fully autonomous vehicles within the next six years.
Hyundai Motor held CEO Investor Day for shareholders, analysts and credit rating agencies at the Conrad Hotel in Seoul on Dec. 4. Company president Lee Won-hee made a presentation on Hyundai Motor's “2025 Strategy” and three mid- to long-term key financial goals.
The core of Hyundai Motor's strategy is to establish market leadership by strengthening its business competitiveness and linking future mobility products and services. “We have set 2025 as the year when our company transforms into a smart mobility solution company that provides comprehensive mobility solutions through a combination of intelligent mobility products and services,” Lee stressed.
To this end, the company will focus its capabilities on boosting its share in the global electric vehicle market. By 2025, the company plans to expand annual global sales of electric vehicles to 670,000 units, including 110,000 hydrogen fuel cell vehicles, to join the world's top three electric car companies.
Hyundai Motor will actively promote electrification of new models in major markets such as Korea, the United States, China, and Europe beginning 2030 and in emerging markets such as India and Brazil beginning 2035. The Genesis brand will launch its first fully electric car model in 2021, and after 2024, will expand its electric car lineup.
In addition, by 2025, autonomous driving (second and third levels) and advanced driver assistance system (ADAS) technology will be loaded on all models. As for fully self-driving cars, Hyundai Motor will develop a platform by 2022 and start mass-production of fully self-driving cars in 2024.
As preliminary work, the carmaker will develop a pilot car sharing and robot taxi project in preparation for the commercialization of autonomous vehicles at the fourth or higher level in the North American market. It will enter the markets of Korea, Asia-Pacific, Southeast Asia and Australia in partnership with local mobility service companies. In Europe and Russia, where service markets are mature, the company will carry out projects to combine intelligent mobility products and services first.
With the goal of successfully transforming into a future mobility solution company, Hyundai Motor will invest 61 trillion won over the next six years. The annual average will top 10 trillion won. Specifically, the carmaker will invest 41 trillion won to sharpen its business competitiveness such as products and commercial investments and invest 20 trillion won to secure future business capabilities in the areas of motorization, autonomous driving, connectivity, mobility, AI, robotics, PAV, and new energy. .
This amount is an increase of about 16 trillion won from 45,300 billion won in an investment plan announced on CEO Investor Day in February. The overall size increased significantly as investment in strategic equities grew to secure future business capabilities. Hyundai Motor also raised its operating profit margin or OPM target in the automotive sector to 8 percent in 2025 from 7 percent in 2022.
Its global market share target for 2025 has been set at 5 percent, an increase of about 1 percentage point from 2018.
Hyundai Motor will also enhance its shareholder value by taking such steps as a market-friendly shareholder return. The carmaker decided at a board meeting on Dec. 4 to buy treasury shares worth 300 billion won by February next year in order to enhance trust from shareholders and the market.