The merged entity between Hyundai AutoEver, Hyundai MnSOFT, and Hyundai Autron is set to be launched on Thursday. The entity will look to become a global mobility software (SW) company by strengthening Hyundai Motor Group’s competitive edge SW.
According to Hyundai AutoEver on Wednesday, the entity’s business will be made up of automotive SW, applied SW, mobility, ICT (information communication technology), and enterprise IT. The entity will look to create synergy while looking for new businesses while utilizing strengths of Hyundai AutoEver (IT service), Hyundai MnSOFT (navigation-based connectivity and detailed map), and Hyundai Autron (automotive SW).
Hyundai AutoEver selected Vice-President Seo Jeong-sik of Hyundai AutoEver to be the new president of the merged entity during an annual meeting of shareholders on March 26 and finished making preparations for the establishment of the merged entity and reorganization.
The entity will focus on development of automotive SW and establishment of standards, integration of cloud-based service infrastructures, comprehensive operation of mobility data, and establishment of foundation for SW open innovation. It plans to actively respond to changes such as mobility, electrification, connectivity, and autonomous driving that are taking place in the global automotive industry.
The entity is expecting ‘economies of scale’. It will have about 4,000 SW engineers and it is set to make about $1.7 billion (1.9 trillion KRW) in annual sales (based on 2020). It will combine overlapping roles and businesses and save expenses.
When a decision for the merger was being made in January, a report that was published on the Financial Supervisory Service’s DART (Data Analysis, Retrieval and Transfer) system predicted that the merged entity would be able to reduce expenses for management, share and distribute physical and human resources, utilize tangible and intangible assets, and achieve efficient operation from unified management even though business areas of the three companies are different from each other.
It is expected that the entity will raise SW quality for products of the Hyundai Motor Group and allow the group to easily adapt to changes in the environment.
Importance of SW has become very important in the automotive industry as more than 100 SW-based automotive controllers are used for single car when 20 or so SW-based automotive controllers were used for single car 20 years ago. This is the reason why automotive groups such as the Volkswagen Group and the Daimler Group have set up groups that specialize in SW.
The entity is expected to raise SW quality and level of competition of the Hyundai Motor Group’s products by maximizing efficiency in development. It plans to provide convenience and safety through assistant driving, navigation linked to detailed map, and various connectivity and infotainment services.
The entity will also allow the Hyundai Motor Group to focus on establishment of foundation for platform business that is one of the group’s three strategic directions.
There are also high expectations that the entity will be able to secure leadership in SW and new growth engines. While it looks to become the leader in mobility SW in the world, it also plans to look for new businesses such as robotics, smart city, and UAM (urban air mobility).
“By maximizing synergy from the three companies, the entity will secure core technologies for automotive SW and strengthen connectivity in automotive services.” said Vice-President Seo Jeong-sik of Hyundai AutoEver during the shareholders meeting. “The entity will look to be a global leader in mobility SW by focusing on development and supply of standard automotive SW and data management that is necessary for mobility services.”
The stock industry predicted that the merged entity will lead to improvement in shareholders’ values as Chairman Chung Eui-son of the Hyundai Motor Group who needs to prepare financial resources will have 7.44% of the entity’s share. The group’s businesses are expected to expand as Hyundai Motor Company, Hyundai Mobis, and Kia Motors own 67.8% of the entity’s share.
Staff Reporter An, Hocheon | email@example.com & Staff Reporter Park, Jinhyung | firstname.lastname@example.org