·
For the Chinese market, Hyundai is still waiting for the opportunity to exert its strength. This timing is likely to occur when traditional businesses are stabilizing and the electric business is starting to climb.
Author 丨 Meng Hua
Edited by 丨 Dahua
Produced 丨 Automan Media
On March 18, the two major shareholders of Beidian (BAIC Investment and Hyundai Motor) signed an agreement to jointly increase the capital of Beixin by US$942 million (about 6 billion yuan) in two phases.
After the completion of the capital increase before the end of the year, the registered capital of Beixin will increase to US$2.978 billion (about 18.9 billion yuan), and the equity ratio between the two sides will remain unchanged.
Since last year, there has been speculation that Beijing's Hyundai stock ratio may change, and the official Chinese and Korean executives in the north have denied it.
The basis of the market rumors is that Beijin's performance in 2021 is underperforming, with sales of about 385,000 units, down 23.3%. It has been down for 5 consecutive years from its peak in 2016.
Hyundai Motor revealed that Beijin lost 6.28 billion yuan (about 1.2 trillion won) and 5 billion yuan (about 950 billion won) in 2020 and 2021, respectively.
However, the coordinated "common and equal" capital injection action of the major shareholders of the two sides dispelled the content that public opinion has been worried about, that is, due to unsatisfactory performance, the major shareholders of the two sides have diverged on the strategic development direction of the north.
1
The pace of electric vehicle business has changed from slow to fast
According to the official announcement, the capital increase is to strengthen the safety of the operation of the north current funds (that is, to supplement the working capital). Another funding need is electrification.
Beijing Hyundai electrification is not too late, launching the HEV version of Sonata in 2016 and the PHEV version of Sonata in 2018. In 2019, Onsino (EV), Festa pure electricity, and Mingtu pure electricity were introduced, but these are "oil to electricity" products, and the market is not optimistic.
As the "HSMART+ strategy" of hyundai's "three wisdoms" (electric, connected, and autonomous driving), it was released as early as 2019. Hyundai Motor is also the first joint venture to have a global pure electric platform E-GMP.
The new electric brand IONIQ (Ani Kr) 5 developed based on the platform has been launched in 2020, but it has not been localized for a long time, but it has become a regular visitor to major exhibitions. It is reported that Ani Kr 5 will be domestically produced in 2023. It gives people the feeling that Beijing Hyundai is slow in the transformation of electrification.
In the Chinese market, Beijing Hyundai has indeed encountered strong challenges from Chinese brands, and its downward cycle is basically the same as the rise of the latter. If you can't come up with your own characteristics in brand segmentation, technology upgrades and services, market awareness is still difficult to raise.
Although the public is happy to see the "oil to electricity" directly transition to a new pure electric platform, bei is not ready. The latter requires a significant upgrade of the existing production line.
The new forces built their own or OEM platforms completed this investment as early as around 2018. Even so, there are still only a few pure electric brands that are truly profitable today, including Tesla, BYD, Wuling and so on. Others are either not financially independent or have only achieved a positive gross profit.
Supply chain and production line investment takes time, but the technology iteration of pure electric platform is very fast, which is the rhythm brought up by new forces, and it is also a unique performance of the Chinese market, that is, the technology upgrade cycle caused by competition is very short.
The investment cost has not yet been recovered, and a new generation of technology is coming. If you rush to grab the rhythm in China, it is likely to lose money (Volkswagen is an example).
Hyundai motor only intends to launch the Ani Kr 5 in overseas markets while iterating on the technology until the technical stability reaches a level, and will not consider investing in China. In Hyundai's view, next year all aspects of the conditions are available, there should be window opportunities.
In addition to Ashkenazi enterprises, other joint ventures in China, including Japanese companies, are mostly "pressing the rhythm" and do not want to be chaotic by the new technologies of domestic start-up companies.
China's new forces and entrepreneurial brands incubated by state-owned enterprises have adopted aggressive "offensive methods". This has to do with the fact that they don't have to think too much about profitability in the short term, and investors are not putting too much pressure on them.
But this approach by the new forces does put pressure on the joint venture brand. The latter pays more attention to pure business indicators such as investment recovery cycle, investment cost-effectiveness ratio and investment efficiency, and is less "on top" of technological competition.
Beijing Hyundai needs to update its own brand image at the same time, and it is a good idea to create a new electric brand, because it allows the public to distinguish between traditional brands and new energy brands, ensuring that the inherent brand impression does not drag on new pure electric products.
Once the image is updated, the accumulation of technology is gradually implemented into an engineering capability, and it is the time for a large-scale counterattack. Therefore, Hyundai Group looks at the Chinese electric vehicle market from a global perspective.
Last year, Hyundai suffered an annual decline only in China and South Korea. In fact, Hyundai Group does not have great hopes for the performance of the Chinese market in 2021, and the target set at the beginning of the year is only 370,000 vehicles, and The North has actually completed the sales target. Everyone only remembers the north that sold millions of dollars in 2016 and attacked the city, and still thinks that it is in a downward cycle.
Evidenced by this idea, Hyundai intends to return to the Japanese market after it withdrew from Japan in 2009. Because Japan's electric vehicle market is in its infancy, the capacity is relatively small. At present, the Japanese version of the hydrogen fuel cell vehicle NEXO and the electric vehicle IONIQ (Ani Kr) 5 has been released.
2
Hyundai's global electric business is expanding rapidly
Hyundai Group in 2021 is actually proud of the spring breeze. In 2021, Hyundai motor sold 3.89 million units worldwide, an increase of 3.9%, and Kia sold 2.777 million units worldwide, an increase of 6.5%. Hyundai-Kia surpassed GM to rank fourth in the world.
Unlike in China, Hyundai Group's SUV models and electric strategy have been a great success. Its supply chain management strategy was rated as "effective" on the grounds that Hyundai-Kia did not suffer a major shutdown in a difficult 2021. The launch of the EV6 and The Ani Kr 5 has given Hyundai-Kia an electric starter.
In 2022, the Ani Kr brand will also launch new models, and the Ani Kr 6 (sedan) and the Ani Kr 7 (seven-seater off-road vehicle) are expected to make an appearance later this year. The high-end Genesis electric vehicle GV70 will also be available. Hyundai-Kia has initially realized the configuration of the electric product series.
In 2021, Hyundai's new energy sales exceeded 160,000 units, an increase of 44%; hydrogen fuel vehicles sold 9,620 units, continuing to lead (in fact, in terms of passenger cars, hydrogen-powered players are left with only Hyundai Motors and Toyota). Among them, the Ani Kr 5 sold more than 65,000 units, the model sold 22,700 units in South Korea, 19,200 units in Western Europe, and only 153 units in the United States.
Kia Motors' EV6 sold nearly 30,000 units, and the Geniseys GV60 sold more than 1,000 units. In 2021 (starting in March 2021), sales of the models belonging to the E-GMP platform will be close to 100,000 units.
In Europe, Hyundai-Kia was the largest car company with sales of more than 1 million units, up 21%. In January, Hyundai and Kia both grew sales by more than 30 percent, continuing last year's excellent performance and replacing Renault as the third largest car company in Europe.
In the U.S., Hyundai motor sold 738,000 units in 2021, up 19 percent. This is the third fastest year of growth in the history of Hyundai's development in the United States.
This greatly boosted Hyundai's confidence, so it planned to return to several single markets. In addition to the aforementioned Japan, Hyundai Motor has also built a new plant in Indonesia, with an initial production capacity of 150,000 units per year, and then expanded to 250,000 units per year, specializing in the production of electric vehicles. Hyundai intends to invest $1.55 billion in Indonesia by 2030.
Obviously, Hyundai is trying to build Indonesia into an ASEAN production center for electric products.
Because Indonesia has most of the metal resources necessary for power batteries, it has always been in the position of raw material supplier in the global battery production map.
Indonesia very much welcomes investment from Hyundai and LG. LG Energy Solutions and Hyundai Motor will invest $1.1 billion to build a battery plant, which will be put into operation in 2024, with an estimated cell capacity of up to 10 GWh/year. However, this goal is widely suspected by the industry.
At present, Hyundai Motor has recovered its market prestige from the recall storm of Kona Electric. Ani Kr 5, Ani Krypton plug-In, KONA EV, Tucson PHEV, Santa Fe PHEV, Kona Electric form a wide range of new energy product camps.
What can support the ambitions of modern automotive products are lithium iron phosphate (LFP) batteries.
As we all know, Korean battery suppliers have been making soft pack batteries in the United States. In order to compete with Chinese brand electric vehicles and form a differentiated competition with multinational competitors, Hyundai Motor decided to enter the LFP solution. Like other competitors, the LFP was first used in entry-level models. It is worth mentioning that the development of LFP models is carried out in The Local Government (Korea's Yiwang Research Center).
Hyundai's traditional supplier has always been "LG Energy Solutions", and using SKI products can easily anger LG, because LG uses patent barriers to limit SKI's operations in the United States. But in Europe, Hyundai intends to purchase both LG and SKI's ternary lithium batteries (NCMs).
Beijing Hyundai is an important part of this huge plan. In China, Beijing Hyundai also purchases SKI batteries because of the partnership between BAIC and SKI (Jihu uses SKI batteries).
Beijin crossed the traditional supply sequence and reached an agreement with the Cataline Era, which provided both ternary and LFP batteries. Bydy's Fordy Battery will also begin to provide LFP batteries to the north from 2023.
According to the current output, there is no need to organize the supply of batteries at all. These agreements fully indicate that the current electric vehicles in the north will start to be in volume next year. In particular, the LFP model will appear in the North Product Series next year. At that time, the domestic electric vehicle market will appear heavyweight competitors.
In terms of specific models, the first 800V models such as the Ani Krypton 5 and EV6 used SKI batteries, while the Kona EV used both SKI and LG batteries. The recall did not affect Hyundai's cooperation with LG.
With the help of Hyundai's LFP application plan, LG and SKI are developing their own LFP batteries.
The entire Hyundai Group's global electric vehicle sales may achieve 50,000 units in a single month in the second half of this year. However, the main market is still in the Korean and European markets. Beijing Hyundai is working on electric power and needs to wait until next year. Whether there will be a high demand for hyundai's electric vehicles in the United States, Hyundai is still watching.
3
Integrate China into modern global strategies
As part of this determination, Hyundai CEO Zhang Zaixun, who has been in office for more than a year, announced at the end of 2021 that Hyundai will completely stop investing in new internal combustion engines and instead invest heavily in areas such as battery technology and electric vehicle production bases.
Zhang Zaixun said: "The change in consumer sentiment towards electric vehicles is a strong motivator for us, and we see a clear signal from the market that demand will continue to increase. ”
This explains why Hyundai's investment in electrification has gone by leaps and bounds, and it's a throw at money. When the "HSMART+" strategy was first released (in fact, it was attached to the development plan of electric power), Hyundai Motor did not intend to make such a large investment.
Hyundai plans to complete an investment of $7.4 billion in the U.S. by the end of 2025 to upgrade its electric production line and launch electric vehicles on a large scale.
Hyundai Motor also announced that it will launch 17 pure electric models by 2030. Among them, Hyundai has 11 models and Geniseys has 6 models. Starting with the E-GMP platform, Ani Kr 5 continued to build an electric vehicle matrix consisting of 6 SUVs, 3 sedans, 1 light commercial vehicle and 1 innovative model on the E-GMP platform, and achieved annual sales of 1.52 million electric vehicles.
In contrast, Hyundai Motor's capital increase of 471 million US dollars to Beijing Hyundai is just a small start. Hyundai has not placed heavy bets in China, and the pace has no intention of suddenly speeding up. But the intention to maintain existence, to trade time for space, is clear. The focus of its overseas business is still in Europe and the United States, especially the United States.
For the Chinese market, Hyundai is still waiting for the opportunity to exert its strength, rather than seeking the opportunity to retreat, which is certain. This timing is likely to occur when traditional businesses are stabilizing and the electric business is starting to climb. Hyundai is not short of chips (funds) and determination, just waiting for a signal. The same is true when it comes to shifting to an electric strategy.
From this, we can also understand the reason why Dongfeng Yueda Kia's equity change and Dongfeng's withdrawal, Kia is determined to continue the business. Even if the business encounters difficulties, in the view of Hyundai Group, it is more important to maintain the existence in the number one single market, and the value of perseverance can be reflected when the wind is headwinds.
Past experience shows that Hyundai's promised investment, even if it is not a contract with BAIC, even if it is just an official idea, will basically be fulfilled, rather than habitually mouthing like some new forces that run overseas to operate.
Hyundai Motor understands that the key to the challenges facing its business in China is that Hyundai Motor will increase its efforts to operate high-end brands while investing in electrification. This can be seen from the fact that 1/3 of The Enises' electric vehicle planning occupies.
At an investor forum earlier this year, Jang proposed that Hyundai's total investment by 2030 was 95.5 trillion won (about 500 billion yuan), of which more than 20% was dedicated to electrification (excluding investment in the United States).
Hyundai, Kia and Genissy will sell 560,000 electrified (HEV, PHEV, EV, FCV) products by 2025 and 1.87 million all-electric (EV) vehicles in 2030; Hyundai's electrification profit margin will reach 10% or higher.
Pure sales figure expectations are one thing, and it is rare to expect profit margin targets for such a distant future. This shows that Hyundai Motor attaches great importance to the health of business operations, rather than throwing money at things.
Specifically, Hyundai plans to gain an 11 percent market share of electric vehicles in the U.S. (currently 4.06 percent) in the U.S. and a 6 percent market share in Europe and 58 percent electrified models in the home country. Currently globally, Hyundai's share of electric vehicles last year was 4.8%.
In the Chinese, American and Korean domestic markets, Hyundai Motor will be based on the localization of battery supply, while in Europe, it will seek to establish a battery supply alliance.
Although China is still ranked as the first of Hyundai's nine regional markets, Hyundai motor did not mention the goal of electrification in the Chinese market. This also once again confirms the analysis of "Auto man", Hyundai Motor is still "walking and seeing" and taking the "light investment" route for China's electric vehicle business, until there is an obvious inflection point.
But that doesn't mean Hyundai is doing nothing in China. On the contrary, Hyundai Motor not only sees China as a market, but also an increasingly important source of intelligence, so it has continuously increased its investment in research and development in China.
The official opening of Hyundai-Kia China's Forward-Looking Digital R&D Center in Shanghai last year was an important shift in Hyundai China's strategy. With customer needs at its core, the center will focus on mobility, electrification, connected technology and autonomous driving. Compared with the "HSMART+" strategy in 2019, there is one more "mobility" research and development direction.
In 2013, Hyundai Motor established the Hyundai-Kia China R&D Center in Yantai, which will continue to cover the entire process of model development. In 2017, Hyundai Motor established the China Big Data Center in Guizhou. In 2021, Hyundai Motor will establish a hydrogen fuel cell production and sales base "HTWO Guangzhou" in Guangzhou.
Hyundai-Kia has changed the way it has looked at China in isolation, bringing China more into its global strategy. One of the goals is the transformation of the electric business, and the Chinese market should speed up to catch up with the product rhythm of the modern United States; the second goal is to be regarded as an important research and development node for digital transformation; and the third goal is to expand extensive cooperation with battery suppliers in China.
As a result, Hyundai-Kia's relationship with its Chinese partners, BAIC and Yueda, remains very solid in the long run.
【Copyright Notice】
This article is the original manuscript of Automan Media
Unauthorized reproduction is not permitted
▼