Apple car debacle an open public setback for Hyundai
Hyundai chairman Euisun Chung - central to the company’s transformation from typical carmaker to mobility giant promoting flying vehicles and hydrogen-petrol cells - had his first, very general public, stumble this week.
On Monday, after a month of strong speculation around who might crew with Apple to greatly help develop its much-vaunted self-driving electric car, Hyundai and its own affiliate marketer Kia were forced in distinct exchange filings to state they weren’t in virtually any talks with the tech behemoth, backing away from an earlier Hyundai affirmation that confirmed these were in discussions.
That January 8 initial disclosure, and also other information of talks, without doubt infuriated Apple, which will keep development projects solution for years and controls relationships with suppliers with ruthless efficiency. It’s unclear if - or when - discussions between your two might resume.
Hyundai "might have learned lots of lessons through this issue", said Koh Tae-bong, head of exploration at HI Investment & Securities in Seoul. "Keeping internal discussions interior is important."
The fracas - which saw Hyundai edit and dial again its January statement twice - is an embarrassment for Mr Chung, who took over from his dad Mong-Koo Chung as chairman of South Korea’s second-most significant conglomerate in October after two years as executive vice chairman. And if talks with Apple hardly ever restart, it’s a small disappointment, considering there are only a small number of global automakers with the capability and capacity to mass manufacture vehicles.
It’s also an unfortunate setback found in what has been a relatively smooth go for Mr Chung so far. In his four a few months at the helm, and during his past tenure, Mr Chung has demonstrated his deal-making prowess and place Hyundai on a training that noses it toward a cleaner, greener potential.
There are also tie-ups with Uber and Aptiv for the development of flying and autonomous cars, with plans to debut the former the moment 2028. Hyundai hydrogen fuel-cell trucks already are on the roads in Switzerland.
Mr Chung in addition has sought to boost profitability at Hyundai, adding extra sport-utility automobiles to the line-up and plowing money in to the carmaker’s electric-automobile ambitions. Hyundai Motor will start selling the Ioniq 5, its initial EV assembled on the company’s dedicated EV program, next month in Europe.
In December, Hyundai scored a coup after it struck a deal to get 80 % of Boston Dynamics, a transaction that valued the mobile robot firm at $1.1 billion. The broader Hyundai empire is exploring practical uses for professional robots, with the purpose of one day growing them for sophisticated services like caregiving for patients at hospitals.
There were other, earlier, wins as well.
Mr Chung gained investor support in March 2019 when he successfully derailed Elliott Management’s bid to overhaul the plank, a year following the activist hedge fund blocked an $8.8bn merger of the chaebol’s several units. That enabled Mr Chung to move ahead with his drive to invest billions of dollars in potential technologies, in addition to go on a wholesale restructure.
The 50-year-old has since been working to improve the company’s culture, communicating more often with staff and encouraging employees to leave their suits and ties in the home and come to work in more casual attire, an edict once hard to assume at a huge Korean firm where social etiquette is important. That same year, Mr Chung kept townhall meetings and had taken selfies with staff.
"We have to transform the group from being a follower right into a leader in the market with innovative strategies," Mr Chung stated in his speech to personnel in January 2019. "We must shift apart [from] a traditions where failures are avoided and criticised to a culture where we embrace failures and learn from them."
While a lesson in how exactly to play the big leagues, the Apple car experience may turn out to be always a positive thing for Mr Chung and Hyundai, by re-focusing its ambitions, according to Kim Jin-woo, analyst at Korea Investment & Securities, which rates Hyundai a buy.
"Hyundai gets the know-how on how to control supply chains with its experience of a lot more than four years," Mr Kim said. "The Apple information could have grown to be a catalyst for inventory prices, but Hyundai has been producing its projects for future mobility."
Investors have already started to listen. Shares in Hyundai jumped practically 60 % in 2020 while inventory in Kia rose 41 per cent - an impressive result in a year many automakers would rather neglect as the coronavirus pandemic weighed on revenue. Hyundai gained 2 % on Tuesday, bringing benefits since January to 24.5 %.
Kia last month rebranded with a fresh, sleeker emblem, scrapping its oval shaped badge and announcing a fresh slogan ‘Activity that inspires’ to replace its older 'Power to shock' mantra.
"Hyundai’s greatest goal isn’t to become an Apple car supplier," said Kim Joon-sung, an analyst at Meritz Securities in Seoul, who also costs Hyundai a buy. "It could want to be another Tesla."
Source: www.thenationalnews.com
