Hyundai Motor Group is designing a massive overhaul to grant more autonomy to individual overseas units to better respond to their host markets amid flagging sales in China and the United States, its two most important markets.
South Korea’s largest auto conglomerate that runs Hyundai Motor and Kia Motors said on Thursday it will grant incremental autonomy in management affairs to key overseas operations starting from next year. The Seoul headquarter’s role would be adjusted to managing and offering administrative support instead of giving out orders.
The reorganization would create separate regional headquarters overseeing production and sales of their jurisdiction. The revamp will start with North America and India next year and spread to other areas. Kia Motors would first establish headquarters in North America.
The reorganization would allow Hyundai and Kia more flexibility in adjusting their output and shipments according to market conditions. Once regional headquarters gain more authority, it would also become easier for the carmakers to recruit talents in the region.
The changes in industrial paradigm due to the fourth industrial revolution demand flexibility and agility in responding to individual market conditions, an official at Hyundai Motor said.
Chung Mong-koo, chairman of Hyundai Motor Group, has been reiterating that the answer to their ongoing problems lies in the field and ordered reorganization to give more responsibility to overseas units.
Hyundai and Kia were hardest hit among Korean manufacturers from China`s state-sponsored boycott of Korean brands after Seoul`s decision to install a U.S. antimissile system. Hyundai Motor’s sales in China plunged more than 40 percent and Kia`s nearly halved in the first half from a year earlier. The two also fared poorly in the U.S. They have since focused more on emerging markets to offset the losses.
By Lee Seung-hoon and Kim Hyo-jin
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