Hyundai Motor Group: increasing electrified vehicle lineup with 44 models in 2025
Partnering with Pony.ai and Aptiv in autonomous driving, advancing mobility services in USA and Asia
Hyundai Motor Group announced its business policy in January 2020 and unveiled its plan to invest KRW 100 trillion over the next five years, or KRW 20 trillion per year. The investment will be earmarked for product development and capital expenditures to enhance competitiveness in existing businesses as well as for electrification, autonomous driving, artificial intelligence (AI), robotics and new energy areas. Hyundai Motor Co., Ltd. (HMC) and Kia Motors Corporation (Kia) also announced their respective mid-term business plans to advance electrification strategies, autonomous driving technology and mobility services.
In its electrification strategy, Hyundai Group plans to increase the number of its electrified models from 24 in 2019 to 44 in 2025 consisting of 13 HVs (hybrid vehicles), 6 PHVs (plug-in hybrid vehicles), 23 EVs (electric vehicles) and 2 FCVs (fuel cell vehicles). In 2020, the Group will offer HV and PHV versions for its best-selling SUVs including Kia Sorento, Hyundai Tucson and Hyundai Santa Fe.
Regarding autonomous driving technology, Hyundai Group plans to accelerate the development of autonomous driving software technology and commercialize self-driving vehicles with SAE level 4 and level 5 technology in the near future. After developing an autonomous driving platform by 2022, the Group will operate autonomous vehicles in select regions in 2023, leading to commercial production of autonomous vehicles by the second half of 2024. HMC plans to introduce SAE level 2 and level 3 technology as well as advanced driver assistance system (ADAS) for automatic parking into its all models by 2025.
As for mobility services, Hyundai Group established its mobility service venture MoceanLab Inc. in Los Angeles and started its car-sharing service in 2020. The Group will expand collaboration with Grab Holdings Inc. (Grab) and Ola Electric Mobility Private Limited (Ola) mobility platform companies in which it has already invested.
Hyundai Group’s global sales in 2019 decreased by 1.4% year-over-year (y/y) to 7.19 million units due to stagnant sales in its key markets including the US and China as well as slow economic conditions in emerging countries. On the other hand, its financial results recovered as HMC and Kia’s operating profit increased by 54.1% and 73.6% y/y, respectively. The two companies enjoyed improved profitability with enhanced product mix by launching new, competitive models.
However, the Group’s global sales for the period January-March 2020 declined by 13.2% y/y to 1.46 million units due to weak demand caused by the COVID-19 pandemic. Although HMC’s operating profit recorded an increase of 4.7%, it fell from the previous year when excluding the extraordinary gain. Kia’s operating profit also dropped by 25.1% y/y. The Group is anticipated to face weakening profitability in the future as the impact of the COVID-19 crisis continues to hurt the global economy.
In its new model launch plan, HMC intends to update its best-selling models such as the Avante/Elantra and to expand its model lineup for SUVs. It entered a new segment for SUVs by introducing the Venue subcompact SUV. In 2020, Kia plans to launch the new Sorento flagship SUV in Korea, Europe and the U.S. In the Indian market where Kia entered in 2019, it will introduce the new Carnival MPV and the new Sonet compact SUV.
Regarding expansion of production facilities, Kia established a new plant with an annual production capacity of 300,000 units in India in December 2019. In the meantime, HMC is building a new plant in Indonesia, which will be its first production center in the ASEAN region. The new plant is scheduled to start production in December 2021 with an annual production capacity of 150,000 units.
|Hyundai EV KONA Electric (India Auto Expo 2020)||New Kia Sonet compact SUV (Photo: Kia Motors)|
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