Hyundai Motor Company announced a new roadmap—Strategy 2025—intended to secure its position as a frontrunner in the future mobility industry. Under Strategy 2025, the company will foster Smart Mobility Device and Smart Mobility Service as two core business pillars; the synergy between the two pillars is expected to facilitate the company’s transition into a Smart Mobility Solution Provider.
The Smart Mobility Device business will supply products optimized for the services and lay the groundwork to help foster the service business. The Smart Mobility Service business will provide personalized contents and services on the devices to help secure a broader customer base.
Hyundai’s plans for Smart Mobility Device include a wide range of product groups beyond automobiles such as Personal Air Vehicle (PAV), robotics, and last-mile mobility. Hyundai Motor will develop an Urban Air Mobility (UAM) platform business by combining Personal Air Vehicle (PAV) and mobility services.
Smart Mobility Service is a new area of business for Hyundai that will be fostered as a key strategic pillar for future businesses. Services and contents will be personalized and offered through an integrated platform to maximize value for customers.
The two pillars sit atop three key directions that the company has defined: enhancing profitability in internal combustion engine (ICE) vehicles; securing leadership in vehicle electrification; and laying the groundwork for platform-based businesses.
To materialize Strategy 2025 on the Device side, Hyundai will aim for growth that is balanced and steady, seeking balance between markets as well as models while prioritizing long-term sustainability over short-term targets. The company also plans to boost profitability by simultaneously pursuing enhanced value for customers and innovations in cost structures.
In particular, Hyundai aims to secure leadership in electrification and become one of the world’s top three manufacturers of battery and fuel cell EVs by 2025.
Hyundai will address vehicle electrification by first targeting younger demographics and enterprise customers with affordable battery electric vehicles (BEVs) to achieve economies of scale. By 2025, the company aims to sell 670,000 electric vehicles annually, comprising 560,000 BEVs and 110,000 fuel-cell electric vehicles (FCEVs). The goal is to electrify most new models by 2030 in key markets such as Korea, US, China, and Europe, with emerging markets such as India and Brazil following suit by 2035.
The Genesis brand will launch its first fully-electric models in 2021, before expanding its electric lineup in 2024. The high-performance N brand also plans to launch SUVs and EVs, further boosting Hyundai’s competitiveness in electrification.
The company will also simultaneously implement quality and cost innovations to enhance customer value while innovating cost structures.
Quality innovations will maximize customer value based on three smart elements: innovative digital user experience (UX), artificial intelligence (AI) based connected services, and safety-first autonomous driving. With regards to autonomous driving technology, SAE Level 2 and 3, as well as Advanced Driver Assistance System (ADAS) for parking, will be available in all models by 2025, alongside the company’s aim to develop a full autonomous driving platform by 2022 and begin mass production by 2024. Hyundai’s plan to offer differentiated vehicle features to customers is expected to reduce incentive spending and improve customer perception of the brand.
For cost innovation, the company will adopt a new global modular EV architecture to enhance efficiency and scalability of product development, starting with vehicles being launched in 2024. The company also has plans to revamp its sales model through network optimization and new sales methods, to optimize production based on demand, and to expand partnerships with other OEMs.
On the Smart Mobility Service side, the company will aim for a business model that combines product and service and launch an integrated mobility platform to offer customers personalized contents and services.
Strategy 2025 also details regional optimization for Smart Mobility Service. In the US, car sharing and robotaxi service demonstrations will capitalize on the anticipated commercialization of autonomous vehicles of SAE Level 4 or higher. In Korea, Asia, and Australia, Hyundai plans to enter the mobility service market by partnering with leading local players. In Europe and Russia, where the service industry is mature, the company will first focus on businesses that combine products and services.
To this end, Hyundai will earmark KRW 61.1 trillion of investment (US$51 billion) until 2025 for research and development (R&D) and further exploration of future technologies. In the same timeframe, the company will target an operating margin of 8% in its automotive business and aim for a 5% share of the global vehicle market.
Hyundai’s comprehensive mid- to long-term strategic direction was presented by the company’s President and CEO Wonhee Lee during the “CEO Investor Day” forum held in Seoul, which was attended by various stakeholders.