Hyundai Autonet_Business Report FY2006

Business Highlights

Financial overview (in millions of won )
- FY2006 FY2005 Rate of Change
Sales 795,032 474,269 67.6%
Operating Profit 48,419 37,054 30.7%
Net Profit 43,236 31,321 38.0%
Note: Significant increases in sales and income year-on-year are attributed to the merger with Bontec.

Sales by product
- FY2006
Sales Ratio to total sales
Multimedia products 557,600 67.3%
Electric devices 271,200 32.7%
Total  828,800(*1) 100.0%

Note (1*) This figure includes Bontec's sales before it was merged into the Group's operations by the Company. 

New subsidiary

- The Company announced that it has established Hyundai Autonet India Engineering Private Limited in India. The new subsidiary is capitalized at 324.98 million won, and conducts research and development on automotive electric equipment. (From a press release on Apr. 27, 2007)

Merger and acquisition
- The board of directors of the Company reached an agreement to merge with Bontec in February 2006. This merger will integrate Bontec, a supplier of multimedia and automotive electronics components, into the Hyundai Motor Group. Under the contract, one Bontec share will be exchanged for 2.59 the Company's shares. (From a press release on Nov. 16, 2006)

- The Company announced that it will acquire the Cartronics Research Institute of Hyundai Mobis for 35.3 billion won in order to integrate and reinforce its R&D functions and capabilities. (From a press release on Feb. 07, 2006)


R&D Structure
- R&D staff account for approximately 30 percent of the total number of employees
- The ratio of R&D expenditures to the Company's revenue stand at some 7 percent. 
- Working closely with car OEMs from the initial stage of product planning, engineers at the R&D center focus on developing automotive multimedia equipment and electronics control devices. 
- The Company has developed close ties with the car electronics development centers of  Hyundai Motor Company and Kia Motors Corp. In addition to carrying out development activities on mass-produced products, the Company intends to put increased focus on exploratory R&D to engineer innovative next-generation technology; develop core components, which are fundamental items to reduce costs and improve the quality of its products; and enhance its designing capability.    
- In August 2006, the Company decided to establish a new research facility in Uiwan, Gyeonggi-Do.

R&D Expenditure ( in millions of won )
- FY2006 FY2005 FY2004
R&D 57,063 36,420 37,581
% of Sales 7.2% 7.6% 6.9%

Recent developments
- The Company became the world's pioneer in applying Transport Protocol Experts Group (TPEG) technology to a terrestrial Digital Media Broadcasting (DMB) system, developing a dynamic navigation system that is capable of providing real-time traffic information to car drivers. This navigating system informs drivers of the best driving route that enables them to bypass heavy traffic. Graphic data showing major roads within the DMB reception area (between Seoul and Fusan, as well as nationwide freeways) is available that show the driver which roads are congested. The Company developed this technology jointly with Korean Boradcasting System (KBS) and Hyundai Motor, being in charge of developing the receiver. The Company plans to release this dynamic terrestrial DMB TPEG navigation system at the end of August this year. (From a press release on July 27)
- The Company developed RDS radios, which meet the environmental standards introduced in Europe, and started exporting these radios in August, 2006. The RDS radios support multiple FM radio broadcasts, in addition to receiving and showing traffic and other related information on the liquid crystal display of the radio system by means of characters. The RDS system, which was first introduced in Europe in the 1970's, is widely used in the global market today. The Company's RDS radios will be installed as optional equipment in the Carens to be marketed in Europe from September 2006. (From a press release on September 26)  

Technical partnerships
Partner Contractual coverage
Date of signing contract Contract period 
Sirius (U.S.A) Use of patented technology on satellite radios October 2006 Sep. 2006 - Dec. 2010
Sisvel (Italy) Use of patented technology on MP3s October 2006 Oct. 2006 - Sep. 2011
Siemens (Germany) Use of patented technology on smart keys December 2006 Dec. 2006 - 2012

Investment Activities

Capital investment projects

(1) Building the Uiwan research center
The day on which the resolution was passed at a board meeting  August 31, 2006.
Purpose of the project  Integrating R&D capabilities in the area of electronics between the Hyundai Group and the Kia Group.  
Planned amount of total investment 99.2 billion won
Amount invested in FY2006 33.7 billion won
Planned amount of investment after 2007  65.5 billion won
Project period  From September 2006 through August 2008 (24 months)

(2) Building a new plant in Jincheon
The day on which the resolution was passed at a board meeting  November 10, 2006
Purpose of the project Increasing production efficiency
Planned amount of total investment  79.5 billion won
Amount invested in FY2006 4.9 billion won
Planned amount of investment in FY2007 74.6 billion won
Project period From December 2006 through December 2007 (13 months)