Why Hyundai isn't really ready to take a ride on Apple's car of the future
The South Korean company’s lofty ambitions don’t match its ability to deliver in the mundane auto industry. That won’t cut it for the exacting iPhone maker
image for illustrative purpose
After weeks of speculation about a potential tie-up with Apple Inc. to make the car of the future, Hyundai Motor Co. and sister Kia Motors Corp. said they weren't in talks with the Cupertino colossus. They walked back an earlier statement that had loosely confirmed discussions. South Korean media had percolated with reports about a tie-up, even touting a potential size for the investment - almost $3.6 billion. The stock price jumped up and down with the news. An Apple and Hyundai partnership always seemed unlikely. That's because the South Korean company's high-flying ambitions didn't seem to be matched by a real-life performance that fit in with the exacting iPhone maker.
It's not that Hyundai didn't have lofty visions of the future. In late 2019, even as its net income margins were thinning and sales slowed, the company said it planned to invest 61.1 trillion won ($51.8 billion) in connected and self-driving cars, among other things, as part of its "Strategy 2025." The year before, it announced a $6.7 billion plan to boost development of hydrogen-powered vehicles - a technology that is even more advanced than electric-battery powered cars. This year, it said it was investing in a plant in China to produce hydrogen fuel-cell systems.
There are even bolder plans. Hyundai says it is developing a flying car that will carry five or six people within metro cities and hopes to bring it to market by 2028. Group chairman Euisun Chung has said in the past that these air vehicles could be commercialized before advanced self-driving cars. (There isn't much being discussed about driving regulation for the sky, let alone rules for autonomous cars.) Meanwhile, it made investments in a deep learning, computer vision startup and in a maker of agile and mobile robots.
Goals and targets are good to have, especially for an industry that is dealing with the onslaught of technology and regulation. Investors love them too. However, delivering on them has been the challenging part for Hyundai.
In the mundane reality of the auto market, Hyundai has been plagued by production quality issues, civil penalties in the U.S. and car engine problems. Separately, the firm has recalled thousands of its Kona electric cars with battery cell problems. (Bloomberg)
Anjani Trivedi, Howard Chua-Eoan
