Trends in the automotive industry are changing rapidly in the United States, with sedans giving way to SUVs as the era of the internal combustion engine slowly draws to a close.
Jose Munoz, global chief operating officer (COO) of Hyundai Motor, is handling a crucial task of strengthening the Korean automaker’s presence in the world’s second largest auto market.
Hyundai Motor is trying to further consolidate its presence in the United States with more electric vehicles and through its Genesis brand. Last year, the company committed a total of $ 7.4 billion in investments in the United States through 2025.
In an interview at CES 2022, which was held in Las Vegas through January 7, Munoz shared the company’s strategy to stay competitive as the auto market changes so dramatically.
Below are edited excerpts from the interview.
Q. How competitive is Hyundai Motor in electric vehicles and SUVs?
A. Well, I think, first and foremost, we now have the best portfolio we’ve ever had, and I think we are preparing to be very competitive in the US market based on the megatrends in the market. One of the major trends in the American market, as everyone knows, is the growth of SUVs. So with the launch of our SUV and the focus we put on developing these vehicles with the launch of the new Tucson, the new Santa Fe and also the Santa Cruz, we were able to achieve around 65%, a mix of SUV.
If we look back a few years, we were around 35 to 37 percent. Electrification is another big trend in the US market. So we put special emphasis and I’m very, very happy to see two things. Now, the total mix of green cars – including fuel cells and EV plug-in hybrids – accounts for about 10 percent of our total sales. And then sales of battery electric vehicles have increased by more than 130% year on year.
So we are really well equipped. We’re really getting ready to support the 40-50% mix of battery-electric vehicle sales in the US market by 2030. The third trend is luxury. And it is also a great success for the group. We focus on Genesis and become a true luxury brand. And then not only have we tripled our sales year over year, but I’m very proud that our consumer transaction price, according to JD Power, a so-called PIN, is higher than big competitors like BMW. , like Audi, Lexus. So this is remarkable. And it’s not about driving sales, it’s about the transaction price that really matters to the consumer.
What is the biggest challenge in developing Hyundai Motor’s position in the United States?
We are in a very uncertain market situation with uncertain supply due to the shortage of chips and also logistical challenges. These are also our biggest challenges. However, in 2021 we had the same challenge, and our company did better than others. I think our global headquarters have done a very good job optimizing sourcing and production by being more flexible than our competitors. And then we did the same in the United States
The percentage of lost production was lower than that of our competitors. If you remember when the pandemic started, we were the last to shut down the factory. We were the first to resume production. We were able to change the way we operate to adjust production plants to available parts, which allowed us to have a better supply than others.
Is Hyundai Motor planning to expand the charging infrastructure in the United States?
The charging infrastructure, we know, is a great catalyst for increasing the sales of the EV battery. One of the activities announced by the Biden administration: They are going to open around 500,000 EV stations in the near future. So what we have done is the following.
First, we made an agreement with Electrify America and then, as an example, an Ioniq 5 that we have just launched on the market will allow customers to charge at low cost for two years. I think it is important. We are very confident that if this plan is successful, we will be able to expand to other models. We actually started with Kona, and it was pretty successful.
And then I want you to also know that we are not only working on battery electric vehicles but also making sure that for fuel cell electric vehicle sales we also expand our charging infrastructure. Additionally, we are launching Ioniq as a sub-brand in the United States. We have a selectivity criterion determined for Hyundai dealers who will become an Ioniq 5 dealer. Thus, not all Hyundai dealers would be Ioniq dealers who meet the selectivity criteria. One of the criteria for becoming an Ioniq reseller is to provide a charging infrastructure.
How is Hyundai Motor’s plan to produce electric vehicles going in the United States? And are there plans to increase production capacity at existing plants in Alabama and Georgia?
So, as you know, last year when Korean President Moon visited the White House, he met with President Biden, and as part of the announcements of the South Korean multinational, Hyundai Motor Group has announced $ 7.4 billion in investments through 2025. As part of these investments, we announced not only that we will support future activities, such as urban air mobility, Boston Dynamics, but also vehicle production electrics in the United States. We are working on concrete plans, which we will announce soon. But what I can confirm to you now is that we will be producing electric vehicles in the United States, without a doubt.
Unfortunately, some American consumers still seem to confuse Hyundai Motor with Honda. How can Hyundai strengthen its brand reputation in the market?
I think the only point I would like to highlight is that we have passed Honda as a group [in the U.S.]. So we are very proud of it. It just happened naturally by working hard. We were able to be the second Asian brand in the American market after Toyota. Basically we have the servants and then Toyota in front of us and we’re just getting started.
So we have a lot of opportunities to continue to grow. And if there is still a lot of potential and we need to close the gap on several dimensions, we are progressing well, which creates a natural demand which has allowed us to have a very good commercial performance. The most important indicator for us is therefore overall opinion. And then the launch of the new Tucson, the launch of the Santa Cruz, the Ioniq 5, but also on the GV 70, 80, and very soon GV 60 on the Genesis brand help. But I would say the Hyundai Motor Group has a really, really lot of strengths that the competition is seeing.
BY THE EUN-JEE PARK [[email protected]]