Hyundai Motor Company, Kia, R&D ‘one team’, the reason why the automobile industry is betting desperately on SDV

Integration and establishment of each organization, including the existing SDV headquarters and CTO
AVP Headquarters and R&D Headquarters scheduled to be operated through two remodels
Global automakers are also speeding up the transition to SDV

Hyundai Motor Group is carrying out an organizational reorganization to consolidate future mobility research and development (R&D) capabilities. The key to this reorganization is the establishment of the ‘Advanced Vehicle Platform (AVP)’ headquarters. As the transition to SDV (Software Defined Vehicle (SW-centered vehicle)) accelerates, the strategy is to maximize synergy by unifying related R&D organizations.

The AVP headquarters is dedicated to future cars, and the R&D headquarters is dedicated to mass-produced cars

According to Hyundai Motor Group on the 16th, the main goal of this R&D reorganization is to bring together the group’s scattered software (SW) development personnel and integrate them into the newly established AVP headquarters. Hyundai Motor Group has been operating 42dot, a global SW center, and the Chief Technology Officer (CTO), Global Strategy Office (GSO), and SDV Headquarters, which are organizations within Hyundai Motor and Kia, to respond to changes in the future mobility market based on their respective expertise. We have responded. However, it has been pointed out that the lack of consistency in innovation strategies due to organizational dispersion and dual leadership, and the complexity of the collaboration system slow down R&D speed.

Through this reorganization, Hyundai Motor Group’s R&D organization is largely divided into two axes. This is the newly established ‘AVP Headquarters’ and the ‘R&D Headquarters’ in charge of research and development work carried out by the existing CTO organization. The AVP headquarters, which focuses on future cars, is expected to focus on SW and innovation, and the R&D headquarters, which performs basic research and development, will focus on hardware and mass-produced vehicles, thereby demonstrating synergy between Hyundai Motor Group’s R&D capabilities.

SDV Headquarters (President) Song Chang-hyeon was appointed as the new AVP Headquarters Head. President Song, who is currently also the CEO of 42Dot, the SW center of Hyundai Motor Group, will lead the future car innovation of Hyundai Motor Company and Kia Motors. The R&D headquarters will be responsible for mass production-related development and securing basic competitiveness. It is expected to play a role in increasing the competitiveness of Hyundai Motor Company and Kia Motors’ new and mass-produced vehicles. To this end, the current CTO organization will be converted to an R&D headquarters system. The R&D headquarters will be overseen by Vice President Yang Hee-won, head of the TVD division, who comprehensively carries out the development of new vehicles for Hyundai Motor Company and Kia Motors.

Previously, Hyundai Motor Group announced a reorganization of its R&D organization in December last year when CTO President Kim Yong-hwa stepped down as an advisor six months after taking office. Hyundai Motor Group has declared that all vehicle models will be converted to SDVs by 2025, and plans to invest 18 trillion won by 2030. Furthermore, we are also pursuing a mid- to long-term SDx (Software-defined everything) strategy that connects all means of transportation and services centered on SW.

Major automakers focus on SDV conversion

The biggest reason why Hyundai Motor Group is pursuing SDV conversion is to secure customers. The main purpose is not to simply make and sell cars, but to increase contact with customers through linkage with cutting-edge technologies such as artificial intelligence (AI), big data, and AR (augmented reality). The possibilities for use of SDVs are endless, so much so that it starts from the moment the car is delivered to the customer.

SDV increases customer loyalty by quickly providing customers with a customized and improved user experience. Like smartphone updates, if your car always maintains the latest features, you can experience performance similar to purchasing a new car without having to replace the car. From the perspective of automakers, this means they can increase the lock-in effect even if they do not produce new cars every time.

Related markets are also growing rapidly. According to market research firm IHS Markets, the global SDV market is expected to increase from $18 billion (about 22 trillion won) in 2020 to $83 billion (about 112 trillion won) in 2030. It has grown more than four times in 10 years, but there is still no strong player. This is why automakers are continuously changing their R&D organizations and putting all their efforts into developing SDV technology.

Currently, Tesla is already making profits by providing software such as emergency light automatic activation function and smart automatic parking, and BYD plans to apply NVIDIA’s self-driving computing platform ‘Drive Orin’ to its next-generation model. . Volkswagen Group announced its goal of applying new software to more than 4 million vehicles by 2030, and General Motors (GM) is proactively investing in SW support services to generate sales of $20 billion to $25 billion (approximately $26 trillion to $33 billion) by 2030. The plan is to make a profit of trillion won.