Hyundai CEO Jose Munoz Talks Company Growth Strategy in US and China

Published Jan 7, 2025, 11:03 PM

Hyundai CEO Jose Munoz speaks with Bloomberg's Stephen Engle in his first television interview since assuming the CEO role at the world’s third-biggest automaker. 

Bloomberg Audio Studios, podcasts, radio news. Hyundai CEO Jose Muno spoke with Bloomberg Steven Engel in his first television interview since assuming this role at the world's third biggest automaker. They discussed what a second Trump presidency means for all automakers, as well as Hyundai's investments and strategy for growth in the US and China.

What are your contingency plans in the United States though, because with the change of administration there to a Trump administration which is signaled that they're going to pull back on those tax credits. They perhaps you also lower some of the fuel efficiency standards as well. How do you play these changes from the Biden administration, which of course had those tax credits under the IRA.

Our company took the decision to make a significant investment in the US during the previous Trump administration. We haven't invested in the US because of IRA or because of incident. This in general is not a good policy to just simply make an investment because of incentives, because they can come and go right. So, as such, we believe that the US market is the most important for US today and it's going to continue to be the most important in terms of not only the absolute but also the growth, and therefore investing and localizing is a good strategy. I think we are in a better place today than we were four or five years ago, simply because the investment gives us much more flexibility.

How concerned are you though that the head of your chief competitor on the EV front, Elon Musk of Tesla, will have an outsized influence in the White House.

I don't see that as a concern honestly.

So if anything, I think having someone who is very close to the US industry and to the EV world, I think it should be positive for the industry because I think it's in his own interest and probably is in the interests of the country to trigger investments and growth, and also to ensure that we maintain competitiveness in our country visa v. Chinese and other competitors. Right, so, I think that's that is a positive.

You're former senior executive at Nissan as an outsider, now as a competitor, that potentially that merger could upset you. Approve you from that third position as the largest OEM. What kind of threat would they merger between Honda and Nisa.

B basically, you know, for us, being number three, being number four, being number two is not an objective a person. Our key objective is to provide to our customers with the best product, the best technology, which is safe, the best customer experience. The industry today is more competitive that has been in the past.

Already. A few years back.

There were a lot of talks and a lot of commory about consolidation as a one potential solution to maintain profitable operations. And if you look at the number of technologies that we have today and compared to five years ago, you have IV and you have much more hybrid, you have pluging hybrids, you have EiV, you have hydrogen. Well, it is really difficult for a single OEM.

To be able to invest everywhere.

So I think we need to be smart in where we invest our money. But at the same time, you cannot lose the opportunity to get access to the best available and future technology by just doing the things by yourself. So I think the concept of the ecosystem and the partnerships we will utilize in addition to the internal development of our own capabilities and technologies, I think we believe that this is the winning proposition, despite the fact that we are the third largest OEM.

What's your strategy for the China market, because the legacy overseas carmakers are struggling, whether it's GM or others, they are losing money after seeing China as the cash cow. It's changed dynamic dramatically. You have a partnership with Baic Motor. I understand you're going to inject some one point one billion dollars into the China JV. Is this money well spent in a market that is losing market share? All the players are losing market share, the foreign carmakers, we.

Have also been impacted very severely by the situation in the Chinese market, and at the moment we are trying to readjust our position in the market so we can make it a business unit which is profitable, which is worthwhile having. But let me tell you that being in China it's also a very good way to experience and to appreciate how to improve and also being humble looking at how competitors are operating in the market to do a better job right And then to me the fact that we are one of the audiences who have decided to state a course and invest and grow with our partner, which is a great partner, begin Auto.

We have a very great relationship with.

I think it shows our commitment to our customers in China and also in other markets.

But can you leverage it as an export base at a time of threatened and realized terraffs?

I think so, provided we get the right scale to be competitive, it could be for certain markets. But we also have to improve in the domestic market by having the right products that the Chinese consumers like, by having the right position in the right distribution, and definitely the competitiveness in terms of a price that the Chinese consumer is looking at.

How can you compete against a company like BYD, which is vertically integrated. It i think makes its own batteries about eighty percent of its own batteries. It has the scale. I mean a lot of these car makers are not profitable, and that's a political issue as well. It's causing political waves abroad. But how do you compete on price and scale in a market that is dominated by the local players.

Well, we are competing the facto.

One thing is to compete, It depends on the market position and well thing is to compete in China itself where at the moment the local Chinese are doing a better job than basically anybody else in other markets fairly though nobody really knows. But we do our best within the rules always. But I would say in other markets like Europe, well we have them as a competitor and we do better than them. You go, for example Brazil Latin American markets, we just finished the year we became number four when the Chinese have sold more cars in Brazil than ever in the history. So we are the competing with them, and that they are not a shortcuts, They are not tricks that you can apply. So you need to be very consistent in terms of having the right economies of scale, having a good quality production capabilities at good cost.

Let's talk about the local situation here right now. Obviously there's some political unrest here in South Korea with President un under fire has been impeached. There's a lot of political uncertainty right now in the presidential office. How is that potentially going to impact consumer sentiment and as well, it's hit the one quite a bit.

First of all, well, I'm not in the politics in any market, and also not in Korea. We're watching carefully obviously, and then we're focusing on our business, where we have not seen any impact so far. We continue to focus on delivering the customer promise and then hopefully this will be clear very soon. Meanwhile, we focus in every single market doing our very best for our consumers.

That was Hyundai CEO Jose Muno speaking with Bloomberg's Steven Engel