This photo provided by Hyundai Mobis on April 24, 2024, shows a rendered image of the company’s envisioned electric vehicle battery plant in Navarre, Spain. (Image courtesy of Yonhap)
SEOUL, Nov. 19 (Korea Bizwire) – Hyundai Mobis Co., South Korea’s leading auto parts maker, on Tuesday outlined its value-up program focusing on profitability and technological prowess amid a slowdown in electric vehicle (EV) sales.
Hyundai Mobis aims to report an annual average of 5-6 percent in its operating profit margin in the three years through 2027, which is up from 3.9 percent last year, the company said at this year’s CEO Investor Day in Seoul.
To achieve the profit target, Hyundai Mobis plans to raise the ratio of deals from overseas carmakers to 40 percent by 2033 from the current 10 percent, the company said in a statement.
It earns about 90 percent of its sales from affiliates Hyundai Motor Co. and Kia Corp., the country’s two biggest carmakers.
“We are targeting to become the world’s No. 3 auto parts maker in 2033 as a profit-focused, qualitative growth will be possible on higher demand for our value-added core auto components (from global carmakers),” CEO Lee Gyu-suk said in the statement.
But the company has set a conservative on-year sales growth target of 8 percent each year in the three-year period, lower than last year’s 14 percent growth.
Hyundai Mobis posted an operating profit of 2.29 trillion won (US$1.64 billion) on sales of 59.25 trillion won last year.
For the whole of this year, Hyundai Mobis targets to win $9.34 billion worth of orders from global automakers, excluding its captive buyers, Hyundai and Kia. The target is up from $9.22 billion won orders last year.
In spite of the EV slowdown, Hyundai Mobis said it will continue to invest in automation, electronic components and vehicle chassis safety to be quick to respond to the upcoming era of software-defined vehicles.
The company plans to “preemptively” develop the powertrain system for an extended range electric vehicle (EREV) pushed forward by Hyundai Motor Group, which aims to mass-produce EREV models in 2026, the statement said.
On the shareholder side, the company plans to increase the ratio of total shareholder returns to more than 30 percent by 2027 from the current 20 percent level by providing more cash dividends and buying back treasury stocks for cancellation.
At CES 2024 in Las Vegas this January, Hyundai Mobis introduced MOBION, a demonstration vehicle featuring the e-corner system, a cutting-edge electrification technology. (Image provided by Hyundai Mobis)
(Yonhap)
