Hyundai Motor units mull dropping 'Hyundai' from company names

South Korea’s Hyundai Motor Group is considering dropping the word “Hyundai” from the names of its subsidiaries such as auto parts maker Hyundai Mobis Co. and logistics unit Hyundai Glovis Co. as part of an effort to reduce dependence on the parent company.

Among the group’s 50 units, some 30 companies used “Hyundai” in their titles, which helped them build a global presence. Their supplies to Hyundai Motor still account for a big chunk of their earnings.

The inclusion of the name, however, has now become an obstacle to expanding their businesses beyond the parent group and leaves them vulnerable to the ups and downs of the carmaker.

In that regard, they are weighing the pros and cons of keeping the word "Hyundai" in their company names or dropping it, according to sources with knowledge of the matter on Wednesday.

Hyundai Motor Group's other units include Hyundai-Rotem Co., Hyundai Wia Co., Hyundai Transys Inc., Hyundai Autoever Corp. and Hyundai Kefico Co.

In Korean, “Hyundai” means modernity. The name was chosen in 1946, when the late Hyundai Group founder Chung Ju-yung established the automaker. At the time, the name helped Hyundai build its image as a frontrunner in the industrialized world.

Since the 2000s, vertically integrated production from automotive components to cars within the Hyundai Motor Group has deepened its units' reliance on the parent group.

Particularly, Hyundai Mobis derives 70-80% of its revenue from Hyundai Motor and Kia Corp., under the automotive group.

This is in contrast to Toyota Motor Corp. The key arms of the Japanese rival – DENSO and Aisin Seki – have diversified sales beyond Toyota and cut their reliance to below half of their revenue.

The move by the Hyundai Motor Group comes as Hyundai Mobis, Hyundai Glovis and other units are striving to win orders from global carmakers such as Mercedes Benz.

Last year, Hyundai Mobis won a chassis module order for electric vehicles from the German luxury carmaker.

Thanks to the order, its overseas contracts reached a record $4.65 billion in 2022. It is now dropping the word "Hyundai" from its English name for global marketing.

Transportation unit Hyundai Glovis signed a 2.2 trillion won ($1.7 billion) shipping order from an unidentified global carmaker last year, its largest-ever contract.

But the move of removing “Hyundai” from their titles may take more time than expected. It may have a negative impact on their brand awareness and cost millions of dollars for some units to change their company nameplates.

Write to Il-Gue Kim at Black0419@hankyung.com

Yeonhee Kim edited this article