SEOUL (Reuters) - South Korea’s Hyundai Motor Group has created two entities to develop future technologies and appointed new heads of product strategy and design in a reshuffle, as it battles plunging profits that have pushed its shares to almost nine-year lows.
The shake-up at Hyundai and its affiliate Kia Motors - together the world’s No.5 auto group - comes a month after it promoted heir-apparent Euisun Chung to executive vice chairman, moving him a step closer to succeeding his octogenarian father as head of the country’s second-largest group.
The group created an artificial-intelligence lab to focus on developing mobility services, the duo said in a joint statement. It also created a fuel-cell electric vehicle business division to double down on hydrogen vehicles.
Hyundai said the overhaul was part of its efforts to accelerate innovation to achieve sustainable growth.
The reshuffle came after Hyundai Motor reported last week that its third-quarter net profit plunged by two-thirds, hit by a $440 million one-off charge related to U.S. recalls.
The recall headaches add to a plethora of issues at Hyundai, which had counted on new SUVs to engineer a recovery following five straight years of annual profit declines stemming from weak sales in its key U.S. and Chinese market.
“The reshuffle came more than one month earlier than Hyundai’s usual executive shake-ups ... and is seen as an attempt to address market concerns about its earnings,” the head of corporate analysis firm CEO Score, Park Ju-gun said.
It also underlines Chung’s focus on design and future technologies, he said.
All eyes are now on the year-end management reshuffle involving top executives such as vice chairmen and presidents, he said. Monday’s reshuffle mostly affected executive vice presidents.
Shares in Hyundai fell 2.8 percent on Monday.
Chung has hired outsiders, including foreign executives from premium brands, to the company dominated by Koreans.
Thomas Schemera, who was hired from BMW to oversee Hyundai’s high-performance car division in March, would be responsible for product planning for autonomous cars, connected and electrified vehicles, Hyundai said in a statement.
Luc Donckerwolke, a former Bentley design chief who started his stint at Hyundai in 2016, will be design head, replacing Peter Schreyer, who last month took over a new role as head of design management.
Analysts have raised concerns that Hyundai is lagging at embracing new technologies such as self-driving cars, electric cars and ride-sharing services, with the race for future technologies intensifying.
Hyundai also said on Monday its head of U.S. operations had stepped down from the role to become an advisor to the firm, but it did not announce his successor.
Reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman and Stephen Coates