Hyundai and sibling Korean carmaker Kia already operate as largely autonomous entities. Now, their regional operations in the U.S. and Europe will operate as largely independent operations to “spur sustainable growth and enhance innovation.”
The move to boost regional autonomy by Korea’s largest automaker is no surprise and follows in the footsteps of what has already been done by major Japanese automakers such as Toyota and Nissan. The first step will come with the establishment of new North American regional headquarters for each of the brands on July 2. Europe will follow shortly afterwards, as will other key global regions.
In a statement, the Hyundai Motor Group – which includes both Hyundai Motor Co. and Kia Motor Corp. – said the move will impact “every aspect of the business, ranging from product planning, marketing, sales, and manufacturing,”
That would allow an individual region to tailor products for local trends. That was a problem for Hyundai in North America as it fell behind in launching new SUVs, such as the original Santa Fe and Tucson crossovers, as market demand rapidly shifted away from conventional passenger cars like the Sonata.
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Insiders tell TheDetroitBureau.com that the company’s top-down, seniority-based management style posed a particular challenge for regional executives to win over the necessary resources, especially if that came in the form of products that didn’t fit in elsewhere.
Each of the new regional headquarters, according to a Hyundai statement, “will operate with greater integration, to actively respond to rapidly evolving market trends and customers’ needs. Each regional headquarters will also have functional divisions for planning, finance, products and customer experience, so it can secure and optimize more effective decision-making systems within each region.”
Hyundai’s new North American headquarters will consolidate three current sales subsidiary, including those in the U.S., Canada and Mexico, as well as the automaker’s Alabama-based manufacturing complex. It will be headed by :ee Yong-woo, currently the head of Hyundai Motor Brazil.
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The Hyundai Motor Europe Headquarters will include not only the current regional sales unit but manufacturing operations in the Czech Republic and Turkey. It will be beaded by Choi Dong-woo, who currently oversees European operations from Seoul.
Kia’s North American Headquarters will consolidate its U.S., Canadian and Mexican sales operations, as well as the smaller brand’s factories in Georgia and Mexico. It will be run by Rhim Byung-kwon.
And Kia’s new European region will include current sales operations, as well as Kia Motors Slavaki, with Park Yong-kew taking the lead.
The two companies hope to complete the global reorganization by next year.
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