Generation shift picks up speed at Hyundai Motor

Group heir Chung Euisun to become board chairman next month

By Nam Hyun-woo

Hyundai Motor Group is expediting a generation shift in its leadership, as Chairman Chung Mong-koo resigned from his position as chairman of the board of the country's leading car manufacturer.

This is expected to pave the way for his son ― the group's de-facto leader Executive Vice Chairman Chung Euisun ― to become the next board chairman and solidify his position as the head of the world's No. 5 carmaker.

On Wednesday, Hyundai Motor said its board decided to appoint Chief Financial Officer Kim Sang-hyun to become its new member, replacing Chung Mong-koo whose term is scheduled to expire on March 16.

The company said the decision was made “to enhance financial decision-making capabilities of the board” and that despite stepping down from the board the 81-year-old will “continue to serve as the group chairman.”

Hyundai Motor will formally approve the leadership changes during its annual meeting on March 19, while the new board chairman is expected to be appointed at a following board meeting.

Chung Mong-koo has been serving as board chairman for Hyundai Motor for 22 years since March 1999. However, he has been away from the group's management since 2018, when Chung Euisun rose as the de-facto leader of the group.

Executive Vice Chairman Chung is expected to take over as board chairman. After taking the post in September 2018, younger Chung became the CEO of Hyundai Motor and Hyundai Mobis last year and since then has been virtually representing the entire group.

Under Chung's leadership, Hyundai Motor has been striving to transform itself from a carmaker to a mobility service provider. At Wednesday's board meeting, the company decided to include mobility services and electric vehicle charging in its business strategies and sought to approve the decision at the general meeting.

Last year, the company unveiled its initiative to invest 20 trillion won by 2025 for electrification, connectivity, mobility, artificial intelligence, robotics and air taxi businesses.

As the group is expected to expedite a generational shift in its leadership, its effort to improve the group's shareholding structure between units is expected to resume soon.

In 2018, the group attempted to break its cross-shareholding structure between Hyundai Motor, Kia Motors and Hyundai Mobis through its Mobis spinoff and subsequent share transactions. However, the group withdrew the plan following opposition from U.S. activist fund Elliott, which had stakes worth 10 trillion won in the three companies.

Elliott was reported to have unloaded those stakes earlier this year, clearing the way for the group to resume efforts to improve its shareholding structure.