Hyundai Mobis says it will innovate its business structure to secure ‘future technological competitiveness and long-term growth engines’.
It says it will shift its focus from automotive component hardware to software and transform its business model into a platform-oriented company.
In accordance with the Hyundai Motor Group’s future strategy in electric vehicles, autonomous driving and Urban Air Mobility (UAM), Hyundai Mobis is to reinforce its technologies as a leading affiliate.
On March 31st, Hyundai Mobis invited local and foreign media to the <2021 Hyundai Mobis Strategies and New Technologies Conference> at the R&D headquarters in Korea and announced its mid- to long-term Transformation strategy for sustainable growth.
“In the automotive industry, which is quickly evolving into a mobility platform ecosystem, the role of automotive suppliers needs to change as well,” said Jung Soo-Kyung, Head of the Planning Division (Executive Vice President), who gave a presentation at the conference. “We will expand our business as a leading company in platform-based systems that have integrated hardware competitiveness with software.”
At the conference, Hyundai Mobis also disclosed new mobility solutions, the urban shared mobility concept cars, M.Vision X and M.Vision POP, and demonstrated new technologies, too.
- Innovating the business model with …Actively breaking new ground
The mid- to long-term growth strategy (Transformation X-Y-Z), presented by Hyundai Mobis, will be implemented largely in three directions, the company said.
First, ‘Transformation X’ is set to innovate continuously as a global enterprise for future growth. Hyundai Mobis will use its core technological competences in the field of autonomous driving, electrification, and connectivity to expand its business to global automakers. To this end, the company will continue to carry out open innovation such as strategic investment in global enterprises with promising technologies.
Currently, Hyundai Mobis is expanding its collaborations with various leading partners. As representative examples, strategic investments have been made in Velodyne, a global No. 1 lidar company, together with collaborative work for mass-production of a level 3 lidar system. Hyundai Mobis is also aiming to cooperate with Envisics, a UK-based AR-HUD specialist.
Secondly, ‘Transformation Y’ is to innovate its business model with the company’s core technological competencies. Hyundai Mobis will expand its business scope in the new mobility service market to meet customer needs. Currently, Hyundai Mobis is known to be developing a level-4 autonomous robotaxi through a technical alliance with Yandex, a Russian IT company, giving shape to its business model.
For business model innovation, Hyundai Mobis is planning to provide dedicated platforms to global automakers or Purpose Built Vehicle (PBV) companies. To build the value chain of a new mobility service, the company is also trying to secure smart factory infrastructure utilizing AI and big data.
Thirdly, Transformation Z is set to find long-term new growth businesses and is related to conducting new businesses based on innovative technologies. Hyundai Mobis will secure long-term growth engines in areas other than the existing automotive business in preparation for at least 10 years into the future.
“Currently, we are looking for a business cooperation in the UAM business with the Hyundai Motor Group and reviewing areas that Hyundai Mobis can enter as well as other business models,” said Mr. Jung Soo-Kyung. “It is expected that it will be possible to utilize the business competencies of Hyundai Mobis to electric propulsion system and avionics in the UAM business.”
It seems that Hyundai Mobis recently adding the manufacturing and sale of aerial mobility components and robot components to its business purposes in its Articles of Incorporation was part of this initiative.
To reinforce its R&D competency, a core driving force of its future growth strategies, Hyundai Mobis decided to continuously increase direct R&D investment from KRW 1 trillion (Approx. USD 0.8 billion) to KRW 1.7 trillion (USD 15 billion) in 2025. In particular, to secure an independent technology that will help the company gain the upper hand in the global market, Hyundai Mobis is planning to increase investments in prior art R&D. As part of this effort, the company is planning to increase the prior art R&D costs, which amount to about 14% of total R&D costs, to 30% in 2025.