SEOUL -- Chung Eui-sun, heir apparent to the Hyundai Motor empire, advanced another step toward taking the reins after being promoted to Group Executive Vice Chairman.
The South Korean auto-making juggernaut, which spans the Hyundai, Kia and Genesis brands, announced the role change in a Friday statement, saying Chung Eui-sun, 47, will oversee the entire group’s operations while reporting to his father, Group Chairman Chung Mong-koo, 80.
“The appointment reflects Chairman Chung’s aim to improve the Group’s overall business responsiveness amid rapid changes in the industry’s competitive landscape,” Hyundai said. “Through its leadership change, the Group also expects to enhance its competitiveness, better responding to paradigm shifts and the advent of the fourth industrial revolution.”
The younger Chung was previously vice chairman of Hyundai Motor Co. As executive vice chairman, he will take an expanded role to oversee daily operations of all Hyundai Motor Group affiliates, including Kia Motors, Hyundai Mobis, Hyundai Steel among others, a Hyundai spokeswoman said. Previously, his responsibilities were limited to only Hyundai Motor.
Chung Eui-sun holds a masters of business administration degree from the University of San Francisco.
His promotion further clears the way for him to take over from his father as the carmaker confronts questions about succession and the reorganization of complicated cross-shareholdings between Hyundai Motor, Kia Motors and their parts supplier Hyundai Mobis Co.
Like its global rivals, the Hyundai Motor Group is also racing to realign its business as the industry confronts an upheaval caused by electrification, autonomous driving, car connectivity and an onslaught of new competitors from such corners as China and Silicon Valley.
Transfer of power
Conglomerates such as Hyundai Motor Group and Samsung Group, which have grown into global companies from the rubble of the 1950-1953 Korean War, are undergoing a transfer of power to third- or fourth-generation leaders.
The appointment comes as Hyundai battles tumbling profits, mounting pressure from activist shareholders to improve its governance, and amid South Korea's trade tensions with the United States that threaten to disrupt its production plans.
Chung Eui-sun has attended government meetings with business leaders in recent years, replacing his father who now makes few public appearances. Chung senior, the all-powerful boss, has presided over Hyundai for about two decades, transforming the company into the world's fifth-biggest automaker along with affiliate Kia Motors.
Hyundai is now struggling to reverse slowing sales in China and the U.S., where the company has suffered due to its delayed response to booming demand for SUVs.
The junior Chung has led the group's efforts to develop future vehicles such as autonomous and connected cars, as well as Hyundai's fledgling premium brand Genesis.
"Hyundai Motor will actively try to transform itself from a car manufacturer to a provider of smart mobility solutions," Chung Eui-sun said in a speech at a forum in India last week. A major challenge for him will be how to consolidate his holdings in the group.
Hyundai Motor Group in May shelved an ownership restructuring plan that would have tightened the family's grip and paved the way for a succession. The plan had been opposed by U.S. activist hedge fund Elliott Management.
"This is a good sign," Park Yoo-kyung, a director at Dutch pension fund APG Asset Management, said of the appointment. "This will enhance transparency about who is controlling the group and who is making key strategic decisions," she said.
South Korea's government has called for reform of the country's family-owned conglomerates, known as Chaebols, in the wake of a graft scandal that led to the ouster of a president, as well as the arrest of the Samsung Group chief.
Reuters contributed to this report.