Hyundai Motor moves to sidestep self-driving fallout in India
This image shows Tesla unveiling its new flying Roadster sports car in Texas, Thursday (local time). AP-Yonhap
Tesla's flying-car ambitions put Hyundai's tech lag in spotlight
Hyundai Motor’s bet on India is being overshadowed by Tesla’s technological leap toward flying cars, exposing the Korean carmaker’s self-driving doldrums.
Hyundai Motor Group recently pledged $15.5 billion (20.7 trillion won) in investment in India through 2032, seeking to strengthen its position in one of the world’s fastest-growing major automotive markets.
The commitment spans manufacturing expansion, research and development, supplier development and next-generation technologies.
However, the scale of the investment does not guarantee that India will become a reliable growth engine capable of offsetting mounting challenges in its cash-cow markets, such as the United States, Korea and Europe.
Hyundai Motor and Kia sold a combined roughly 850,000 vehicles in India last year, with sales growth of just 0.2 percent. That performance lagged significantly behind local rivals Mahindra & Mahindra and Tata Motors, whose sales rose 18.4 percent and 2.9 percent, respectively, during the same period.
Hyundai Motor Group Executive Chair Chung Euisun delivers a welcoming speech at the completion ceremony for Hyundai Motor’s new Pune plant in Talegaon, western India, Wednesday (local time). Courtesy of Hyundai Motor
The gap reflects a competitive landscape in which established domestic players have strengthened their positions through highly sought-after SUVs and products tailored to local demand.
Maruti Suzuki, the current market leader in India, and the two domestic carmakers command more than 60 percent of the country’s passenger vehicle market share, leaving Hyundai and Kia fighting for growth against competitors with deep local roots.
The latest investment is seen as part of the Korean automaker’s strategy to offset falling margin from key markets due to U.S. tariffs, subdued domestic demand and intensifying competition in electric vehicles (EVs) in Europe.
India offers geographic diversification, but its ability to offset these pressures will depend on whether the company can translate capital spending into sustained sales growth and stronger profitability.
Meanwhile, Tesla is raising the stakes on a different front.
Elon Musk's recent unveiling of a rocket-assisted Tesla Roadster offered a glimpse of the EV maker’s increasingly futuristic vision, with a demonstration featuring aerial stunts powered by thrusters developed with SpaceX technology.
Tesla unveils its long-delayed Roadster, at a launch event in Texas, Thursday (local time), nearly a decade after first revealing a next-generation version of its original electric sports car. Reuters-Yonhap
Tesla has indicated that production could begin in 2028, although the vehicle's eventual commercial specifications and practical applications remain uncertain.
The demonstration was more than a futuristic spectacle for traditional automakers. It reinforced Tesla's effort to position itself around software, artificial intelligence (AI) and autonomous mobility rather than conventional vehicle manufacturing alone.
For Hyundai, the contrast is uncomfortable. The Korean automaker is investing heavily in robotics and autonomous driving, but those bets have yet to establish a clear path to substantial earnings.
The carmaker's autonomous driving operations, including 42dot and Motional, continue to require significant development spending, while widespread commercial deployment still remains at least two years away.
Hyundai Motor Group Executive Chair Chung Euisun, left, meets with Indian Prime Minister Narendra Modi at the prime minister’s residence in New Delhi, Tuesday (local time). Courtesy of Hyundai Motor Group
Tesla's technological lead is not assured in every area, and the Roadster demonstration itself does not establish that its flying-car concept is commercially viable.
The issue for Hyundai is whether it can close the gap before investors lose patience with investments that promise long-term returns, but offer limited near-term earnings visibility.
The company has established a broad EV lineup and expanded its manufacturing footprint, but translating those strengths into leadership in autonomous driving will require a different level of technological execution.
India may provide Hyundai with additional volume and a stronger foothold in emerging markets, but it cannot, by itself, resolve the question of whether the automaker can remain competitive as the industry shifts toward software-defined vehicles and autonomous mobility.
Hyundai's latest investment may secure room for growth. Whether it can deliver the next generation of automotive technology quickly enough remains a much harder question.
Shares of Hyundai Motor is drawing a steep downward trajectory after hitting a record high of 783,000 won on June 1, but it more than halved to close at 314,000 won on the last trading day, Friday, on growing concerns over its profitability.
Shinyoung Securities projected Hyundai Motor’s sales and operating profit in the third quarter to drop by 6 and 7 percent, respectively, from the previous year, amid the carmaker's falling sales performance.
“Hyundai Motor’s global sales in the third quarter is estimated to have dropped 11 percent amid toughening market competition and production disruptions caused by its wage negotiation with union,” said Moon Yong-kwon, an analyst at the brokerage house.