Hyundai Motor Company's executive chairman Chung Euisun has cautioned about the challenging year ahead for the global automotive industry due to geopolitical tensions, trade disputes, and increasing competition impacting profitability.
He has also emphasized the importance for the South Korean automaker to expedite its efforts in artificial intelligence.
In his annual New Year speech, Chung mentioned that geopolitical conflicts have the potential to interfere with business operations in specific markets and could even result in temporary halts in trade.
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Moreover, he noted that increasing international trade tensions and intensified competition may place pressure on profit margins in the industry.
Hyundai has faced significant repercussions as a result of US trade policy, particularly the imposition of a 15 percent tariff on South Korea-manufactured vehicles during President Donald Trump's administration.
This action has had a substantial negative effect on the largest automaker in South Korea. Hyundai has calculated that this tariff has resulted in an approximate loss of Won1.8tn ($1.2bn) in the third quarter alone. Operational difficulties have arisen in the US as well, as construction at a Hyundai–LG Energy Solution battery plant is projected to undergo a delay of two to three months due to an immigration enforcement action at the facility in September, as reported by the company.
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Given this context, Chung recognized that Hyundai is lagging behind certain competitors in the competition to implement artificial intelligence throughout its activities. He advocated for increased collaboration with external partners to enhance the group's AI proficiency, emphasizing the vital role of technological competitiveness in successfully navigating the next stage of the industry. He shared his strong belief in the Group's competitiveness in the physical AI field and how this will continue to grow to serve customers.
“We possess world-class capabilities in the design and manufacturing of physical products".
"If we envision a bigger future and boldly expand collaboration with various partners to broaden the industrial ecosystem, I am confident we will deliver greater value to customers,” he says.
Vice-chairman Jaehoon Chang reinforced the Group's commitment to digital transformation, emphasizing that the transformation to a software-driven mobility company is essential to its future success and industry leadership. "I believe that what we have built so far in the unexplored realm of SDV will become a solid foundation for the future envisioned by Hyundai Motor Group. We are still in the stage of perfecting our developments, and we are steadily preparing to deploy SDV across various vehicle models," he says.
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He also highlighted the Group's comprehensive leadership across the hydrogen value chain. "Hydrogen serves as both an energy carrier and storage solution that complements renewable energy and enhances efficiency. Beyond hydrogen mobility, our Group is leading the entire value chain from production to storage and industrial applications.