Six Years into Euisun Chung's Tenure... Hyundai Motor Group Moves Beyond the 'Global Big Three' Toward Physical AI

Electrification and High-Value Model Strategy Strengthen Profitability
125 Trillion Won in Domestic Investment and Expansion of Robotics Business
Labor-Management Cooperation and Monetizing Future Businesses Remain Challenges

Euisun Chung, Executive Chair of Hyundai Motor Group, will mark his sixth anniversary in office on October 14. Through an electrification strategy spanning electric and hybrid vehicles and an expansion of high-value models such as Genesis, Chung has strengthened the group’s earnings base. Now ranked third globally among automakers by sales, Hyundai Motor Group is pursuing a transformation into a “physical AI solutions company” that combines autonomous driving, robotics, and artificial intelligence (AI). However, turning future businesses into tangible profits and establishing a labor-management cooperation framework suited to the industry’s transition remain challenges.

Euisun Chung, Executive Chair of Hyundai Motor Group, is conducting a vehicle evaluation with employees at Hyundai Motor's Brazil plant. Hyundai Motor Group

According to industry sources on October 11, Hyundai Motor Group rose to third place globally in vehicle sales in 2022, after Chung took office, and maintained its “Big Three” status for four consecutive years through last year. Last year, Hyundai Motor and Kia recorded combined revenue of more than 300 trillion won, while their operating profit reached 20.546 trillion won, surpassing Volkswagen Group’s for the first time. With the two companies’ combined operating profit expected to exceed 21 trillion won this year as well, they are forecast to maintain their competitive edge in profitability in the global auto industry.

Growth has been driven by an electrification strategy tailored to market changes and a model mix focused on profitability. Building on the E-GMP platform dedicated to electric vehicles, which Chung spearheaded, Hyundai Motor Group strengthened its competitiveness in electric vehicles. At the same time, as growth in electric vehicle demand slowed, it expanded its hybrid vehicle lineup and production. Rather than focusing solely on electric vehicles, the group has operated internal combustion engine, hybrid, and electric vehicles in parallel to respond to shifts in demand across markets.

In the first half of this year, Hyundai Motor’s global hybrid vehicle sales rose 18% year over year to 363,000, while Kia’s increased 47% to 316,000. As electric vehicle demand grew more slowly than expected, hybrid vehicles helped support sales and earnings. High-margin models, including Genesis vehicles and sport utility vehicles (SUVs), also contributed to growth. Genesis, which Chung has nurtured since the brand’s early days, surpassed 1.5 million cumulative global sales in January this year. Hyundai Motor Group sold approximately 1.76 million eco-friendly vehicles last year, continuing to expand its sales base with a focus on electrified models.

Boston Dynamics' Atlas is learning automotive manufacturing tasks at the Robotics Meta-Plant Application Center (RMAC). Hyundai Motor Group

Expanding Beyond Auto Manufacturing Into Robotics and AI

Chung is increasing investment in future technologies while maintaining the competitiveness of the group’s existing automotive business. In 2020, he established Motional, an autonomous driving company, and in 2021, he acquired Boston Dynamics, launching the group’s robotics business in earnest. Since 2022, the group has pursued the development of software-defined vehicles (SDVs) and autonomous driving technology, with 42dot at the center of those efforts. The investments are intended to cultivate software, autonomous driving, and robotics as new growth areas beyond vehicle manufacturing.

The group has also recently begun preparing to deploy robots in actual manufacturing operations. In September, Boston Dynamics opened the Robotics Metaplant Application Center (RMAC) at Hyundai Motor Group Metaplant America (HMGMA) in Georgia, the United States. The facility is designed for the humanoid robot Atlas to learn and validate automotive manufacturing tasks. Hyundai Motor Group plans to deploy Atlas at the local plant for parts sequencing tasks starting in 2028, and to expand its use to assembly work in 2030. The group intends to validate the robot’s capabilities and safety in actual production settings and gradually broaden its applications.

Hyundai Motor Group is also expanding its partnerships with global companies. It is working with NVIDIA to strengthen its foundations in autonomous driving and physical AI, and with Waymo to build an autonomous driving ecosystem. Boston Dynamics and Google DeepMind are working to develop next-generation humanoid robots. At HMGMA in Georgia, the United States, the group is also demonstrating a future manufacturing system that combines AI, robotics, and automation technologies. At the AI Summit in San Francisco in July, Chung outlined plans to transform the group into a physical AI solutions company, focusing on autonomous driving, robotics, and AI factories.

Jensen Huang, CEO of Nvidia, and Euisun Chung, Executive Chair of Hyundai Motor Group, pose aboard Kia's electric vehicle PV-5 at the Hyundai Motor Group Yangjae headquarters in Seocho-gu, Seoul, on the 8th. Yonhap News Agency

125 Trillion Won in Domestic Investment and a Stronger U.S. Manufacturing Base

Investment to support the transition to future businesses is also continuing. Hyundai Motor Group announced plans to invest 125.2 trillion won in South Korea over the next five years, starting this year. The group aims to respond to the industry’s transformation by increasing investment in future businesses, including AI, SDVs, robotics, and hydrogen, as well as in research and development.

The group plans to invest 9 trillion won in its flagship Saemangeum AI Valley project by 2029. The initiative is intended to establish a growth hub encompassing robotics, AI, and hydrogen energy and lay the foundations for future industries. The group also plans to invest 42 trillion won in the Yeongnam region over the next 10 years to foster AI-driven manufacturing innovation, autonomous driving, future aviation and space industries, and energy infrastructure.

In the United States, Hyundai Motor Group is strengthening its local business operations through strategic investments totaling $26 billion. Last month, Hyundai Steel held a groundbreaking ceremony for its electric arc furnace steel mill in Louisiana, attended by Chung. The project, which involves a total investment of $5.8 billion, aims to build a local automotive manufacturing ecosystem spanning steel, parts, and finished vehicles. It is part of a strategy to respond to changes in trade conditions and stabilize the supply chain by expanding local production. In the hydrogen sector, the group is also expanding its business base across production, supply, and use, centered on its hydrogen business platform, HTWO.

Genesis GV90 Neolun. Hyundai Motor.

Labor Disputes and Monetizing Future Businesses Remain Challenges

Proving the value of future businesses is a challenge Chung must address. The group needs to go beyond securing AI and robotics technologies and translate them into actual productivity gains, customer value, and profits. Given the substantial costs involved in technology development and facility investment, it has also become important to clarify when physical AI businesses will be commercialized and how they will generate revenue. The group must also expand its global production base while developing localization strategies to respond to changes in trade conditions, including tariffs.

Labor-management relations are another key variable. Following difficult wage negotiations this year, Hyundai Motor’s labor union launched a full-scale strike for the first time in 10 years, since the 2016 collective bargaining process. Cumulative sales losses from the strike are estimated to exceed 2.3 trillion won. As the introduction of AI and robotics changes production methods, establishing labor-management consultation and a stable production system is closely tied to future competitiveness. The group needs to reduce conflicts over changes to employment and working methods as new technologies are introduced on the factory floor, while strengthening its ability to execute.

Since Chung took office, Hyundai Motor Group has expanded its global sales and improved profitability while venturing into businesses beyond auto manufacturing. Going forward, the next challenge for the group under Chung’s leadership will be to maintain the competitiveness it has established in electrification and high-value models, translate physical AI into tangible business results, and build a foundation for labor-management cooperation that supports the organization’s ability to execute.

This content was produced with the assistance of AI translation services.