Hyundai unveils new roadmap to bolster regional autonomy

Lim Chang-won Reporter Posted : 2017-11-07 10:44 Updated : 2017-11-07 10:44
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[Yonhap News Photo]

In an effort to cope with sluggish sales in China and the United States, South Korea's Hyundai auto group has unveiled a new roadmap aimed at reforming its global operations by 2020 to strengthen the autonomy of regional headquarters.

Hyundai's global operations would be split into nine regions -- South Korea, China, North America, Europe, India, Russia, Middle East and Asia Pacific. China would have a different concept of management because production and sales there are done through joint ventures.

Each region operates under the direct control of CEOs who will manage production, sales and performance. Hyundai would partially adjust the role and function of its head office for the efficient operation of each region.

"We will reorganize our global operation to reduce the scope of management in our head office for a quick response and strengthen our responsibility and expertise," a Hyundai auto group official said. 

Hyundai plans to finish the reorganization of its headquarters by the end of this year before building a regional operating system that would control production, sales, planning and financing. The first regional head office will be set up in North America by February next year. Final changes would be made in the Middle East and Asia Pacific regions in 2020.

"Our goal is to strengthen localization in overseas markets by transferring the role of control tower to each regional headquarters," the official said.

Due to a sharp drop in sales in China, Hyundai's third-quarter net profit fell 16 percent on-year to 939 billion won (835 million US dollars). Operating profit rose 13 percent to 1.2 trillion won and sales were up 9.6 percent to 24.2 trillion. In the first nine months, operating profit fell 8.8 percent to 3.8 trillion won and net profit was also down 29.9 percent to 3.25 trillion won.