SEOUL -- Hyundai Motor has passed the leadership baton from father to son, and the South Korean auto group's first new chairman in 20 years looks to shepherd the company through a delayed transition to the next generation of vehicles.
The appointment of Chung Euisun, announced Wednesday, makes official a transfer of power that essentially began in September 2018 with his appointment to a newly created executive vice chairman post. He takes over as chairman from his ailing father, Chung Mong-koo.
Over those two years, the younger Chung -- the third generation of the founding family to take the helm -- has changed course from the top-down, self-reliant road his father took for two decades, pursuing fresh designs and new technology amid a sea change in the industry.
Under Chung Mong-koo's forceful leadership, Hyundai raced along an expansion-first path in the 2000s. The automaker thrived in the U.S. and Europe with a "fast follower" strategy, quickly identifying and copying popular models from rivals.
Feared as the "Japanese-car killer," Hyundai vaulted into the ranks of the world's top five auto groups in 2010. But the copycat strategy no longer supports such growth, and years of the elder Chung's tight grip on the company's reins stifled ingenuity among rank-and-file employees.
Chung Euisun, now 49, has led a radical rethink of how the automaker evaluates staff and how it should organize itself, saying he will encourage creative ideas from employees rather than follow his father's management approach to the letter.
"I will foster a company culture that respects communication and autonomy," he said in a speech Wednesday to mark his inauguration as chairman. "I will help cultivate a creative work environment, where talents are respected and realized to the fullest."
Chung also has shifted gears from Hyundai's previous go-it-alone strategy, declaring that broad adoption of outside technology is necessary to adapt to the rapid change afoot in the industry. During his tenure as executive vice chairman, he forged partnerships to help the company play catch-up in so-called CASE -- connected, autonomous, shared and electric -- vehicles.
These include an investment of $2 billion in a joint venture for self-driving vehicles with Ireland-based auto parts supplier Aptiv, as well as tie-ups with ride-hailing company Grab in Southeast Asia and Uber Technologies in the U.S. In electrics, Hyundai has joined hands with startups such as U.K.-based Arrival and Canoo of the U.S. for joint development.
Besides sowing the seeds of new technology, the new chairman has spearheaded a design overhaul at group company Kia Motors.
Since the mid-2000s, when Chung served as president there, the automaker has poached prominent designers from the likes of Volkswagen and BMW and installed them in key positions for development of new models. His efforts led to the creation of Hyundai's Genesis luxury brand and an enhanced lineup of sport utility vehicles.
Chung's changes have paid off through higher sales of new autos, mainly in the U.S. Hyundai in 2019 increased its annual net profit for the first time in seven years.
This year, even with the coronavirus pandemic depressing demand, the company has gotten off relatively lightly, with global sales volume growing year on year in September for the first time in eight months. The automaker has fared particularly well in South Korea and the U.S., where SUVs are popular.
This rapid transformation has not gone off without a hitch. The Kona electric SUV, a strategically important model for Hyundai, has been plagued by fires reportedly linked to its batteries. South Korea's transport ministry announced a recall this month of roughly 25,000 of the vehicles, and the company said this week it is filing a recall notice in the U.S. as well.