SEOUL, January 2 (AJP) - South Korea’s automotive giant Hyundai Motor Group, which includes Hyundai Motor Co. and Kia Corp., is gearing up for a pivotal 2025 as it navigates mounting global competition and an industry-wide shift toward sustainable vehicles.
Hyundai Motor Co. is making a strategic pivot, focusing on mid-to-large-sized electric vehicles (EVs) and next-generation hybrid models, moving away from its recent emphasis on smaller, affordable EVs.
This shift highlights the firm's ambition to establish a stronger foothold in the burgeoning EV market, particularly in premium segments.
Hyundai Motor plans to launch the Ioniq 9, its first large electric SUV, in the first half of 2025. The vehicle, unveiled in November at the Los Angeles Auto Show, is set to debut in South Korea and the United States before expanding into Europe and other markets.
Kia will focus on expanding its purpose-built vehicle (PBV) lineup and affordable EV offerings. PBVs cater to niche markets with small-batch production designed for specific uses.
The group's Chairman Chung Eui-sun has reaffirmed commitment to hydrogen energy as part of its long-term vision. Speaking at CES 2024 in Las Vegas, Chung emphasized the importance of hydrogen as a sustainable energy source, stating, “This transition is not for our generation but something we must prepare for future generations.”
Hyundai Motor named Jose Muñoz its first non-Korean CEO in November - a move widely viewed as a response to potential shifts in U.S. policy, particularly under a possible second Trump presidency. Trump has vowed to cut subsidies for electric vehicles, a significant concern for automakers like Hyundai and Kia.
In another significant development, Chairman Chung recently met with Toyota Chairman Akio Toyoda at the World Rally Championship in Japan to discuss potential collaboration on hydrogen technology.
Previously an automobile repair business, Hyundai Motor was officially founded in 1967 by Chung Ju-yung, Chung's grandfather, and released its first car Cortina In collaboration with Ford Motor Company in 1968.
Hyundai Motor Group consists of about 70 affiliates, including Hyundai Mobis Co., Hyundai Steel Co., and Hyundai Engineering & Construction Co.
In 2023, the group ranked third in global sales with 7.3 million units, trailing only Toyota (11.2 million units) and Volkswagen (9.2 million units).
The group’s financial performance is equally robust. For the first three quarters of 2024, its auto units reported record-breaking cumulative sales of 208.9 trillion won (US$141 billion) and an operating profit of 21.3 trillion won.
If only considering operating profit, Hyundai Motor Group surpasses Volkswagen as second place, 11.1 trillion won off from Toyota in first place.
Individually, Hyundai Motor Co. reported revenue of 42.93 trillion won and an operating profit of 3.58 trillion won for the third quarter of 2024. Compared to the same period of 2023, revenue increased by 4.7 percent, while operating profit decreased by 6.5 percent. Net profit declined by 3 percent to 3.21 trillion won.
Kia reported all-time high revenue and profits for the third quarter. Revenue rose by 3.8 percent year-over-year to 26.52 trillion won, while operating profit rose 0.6 percent to 2.88 trillion won. Net profit increased 2.1 percent to 2.27 trillion won. Compared with the second quarter, sales and operating profit fell 3.8 percent and 20.9 percent, respectively.
However, the group faces increasing challenges as global automakers strengthen their positions.
Japan’s Honda and Nissan has announced plans to merge, aiming to finalize negotiations by mid-2025 and establish a holding company by 2026. Combined, the two companies’ sales would surpass those of the group's automaking units.
In addition, the Korean automaker has experienced falling sales in key markets like the U.S. and China amid increased competition and changing consumer preferences. Global supply chain issues, such as the semiconductor shortage, have also impacted Hyundai's production and sales.
Despite these challenges, Hyundai Motor Group has taken diverse measures to address them, such as investing in electric and autonomous vehicle technologies, expanding its product lineup, and strengthening its brand image. The company has vowed to overcome these troubles by improving its supply chain resilience and adapting to changing consumer preferences.
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