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

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Hyundai CEO Jose Muno

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<v Speaker 1>spoke with Bloomberg Steven Engel in his first television interview

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<v Speaker 1>since assuming this role at the world's third biggest automaker.

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<v Speaker 1>They discussed what a second Trump presidency means for all automakers,

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<v Speaker 1>as well as Hyundai's investments and strategy for growth in

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<v Speaker 1>the US and China.

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<v Speaker 2>What are your contingency plans in the United States though,

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<v Speaker 2>because with the change of administration there to a Trump

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<v Speaker 2>administration which is signaled that they're going to pull back

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<v Speaker 2>on those tax credits. They perhaps you also lower some

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<v Speaker 2>of the fuel efficiency standards as well. How do you

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<v Speaker 2>play these changes from the Biden administration, which of course

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<v Speaker 2>had those tax credits under the IRA.

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<v Speaker 3>Our company took the decision to make a significant investment

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<v Speaker 3>in the US during the previous Trump administration. We haven't

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<v Speaker 3>invested in the US because of IRA or because of incident.

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<v Speaker 3>This in general is not a good policy to just

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<v Speaker 3>simply make an investment because of incentives, because they can

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<v Speaker 3>come and go right. So, as such, we believe that

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<v Speaker 3>the US market is the most important for US today

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<v Speaker 3>and it's going to continue to be the most important

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<v Speaker 3>in terms of not only the absolute but also the growth,

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<v Speaker 3>and therefore investing and localizing is a good strategy. I

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<v Speaker 3>think we are in a better place today than we

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<v Speaker 3>were four or five years ago, simply because the investment

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<v Speaker 3>gives us much more flexibility.

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<v Speaker 2>How concerned are you though that the head of your

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<v Speaker 2>chief competitor on the EV front, Elon Musk of Tesla,

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<v Speaker 2>will have an outsized influence in the White House.

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<v Speaker 4>I don't see that as a concern honestly.

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<v Speaker 3>So if anything, I think having someone who is very

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<v Speaker 3>close to the US industry and to the EV world,

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<v Speaker 3>I think it should be positive for the industry because

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<v Speaker 3>I think it's in his own interest and probably is

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<v Speaker 3>in the interests of the country to trigger investments and growth,

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<v Speaker 3>and also to ensure that we maintain competitiveness in our

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<v Speaker 3>country visa v. Chinese and other competitors. Right, so, I

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<v Speaker 3>think that's that is a positive.

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<v Speaker 2>You're former senior executive at Nissan as an outsider, now

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<v Speaker 2>as a competitor, that potentially that merger could upset you.

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<v Speaker 2>Approve you from that third position as the largest OEM.

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<v Speaker 2>What kind of threat would they merger between Honda and Nisa.

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<v Speaker 3>B basically, you know, for us, being number three, being

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<v Speaker 3>number four, being number two is not an objective a person.

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<v Speaker 3>Our key objective is to provide to our customers with

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<v Speaker 3>the best product, the best technology, which is safe, the

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<v Speaker 3>best customer experience. The industry today is more competitive that

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<v Speaker 3>has been in the past.

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<v Speaker 4>Already. A few years back.

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<v Speaker 3>There were a lot of talks and a lot of

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<v Speaker 3>commory about consolidation as a one potential solution to maintain

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<v Speaker 3>profitable operations. And if you look at the number of

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<v Speaker 3>technologies that we have today and compared to five years ago,

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<v Speaker 3>you have IV and you have much more hybrid, you

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<v Speaker 3>have pluging hybrids, you have EiV, you have hydrogen. Well,

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<v Speaker 3>it is really difficult for a single OEM.

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<v Speaker 4>To be able to invest everywhere.

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<v Speaker 3>So I think we need to be smart in where

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<v Speaker 3>we invest our money. But at the same time, you

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<v Speaker 3>cannot lose the opportunity to get access to the best

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<v Speaker 3>available and future technology by just doing the things by yourself.

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<v Speaker 3>So I think the concept of the ecosystem and the

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<v Speaker 3>partnerships we will utilize in addition to the internal development

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<v Speaker 3>of our own capabilities and technologies, I think we believe

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<v Speaker 3>that this is the winning proposition, despite the fact that

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<v Speaker 3>we are the third largest OEM.

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<v Speaker 2>What's your strategy for the China market, because the legacy

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<v Speaker 2>overseas carmakers are struggling, whether it's GM or others, they

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<v Speaker 2>are losing money after seeing China as the cash cow.

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<v Speaker 2>It's changed dynamic dramatically. You have a partnership with Baic Motor.

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<v Speaker 2>I understand you're going to inject some one point one

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<v Speaker 2>billion dollars into the China JV. Is this money well

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<v Speaker 2>spent in a market that is losing market share? All

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<v Speaker 2>the players are losing market share, the foreign carmakers, we.

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<v Speaker 3>Have also been impacted very severely by the situation in

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<v Speaker 3>the Chinese market, and at the moment we are trying

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<v Speaker 3>to readjust our position in the market so we can

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<v Speaker 3>make it a business unit which is profitable, which is

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<v Speaker 3>worthwhile having. But let me tell you that being in

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<v Speaker 3>China it's also a very good way to experience and

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<v Speaker 3>to appreciate how to improve and also being humble looking

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<v Speaker 3>at how competitors are operating in the market to do

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<v Speaker 3>a better job right And then to me the fact

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<v Speaker 3>that we are one of the audiences who have decided

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<v Speaker 3>to state a course and invest and grow with our partner,

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<v Speaker 3>which is a great partner, begin Auto.

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<v Speaker 4>We have a very great relationship with.

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<v Speaker 3>I think it shows our commitment to our customers in

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<v Speaker 3>China and also in other markets.

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<v Speaker 2>But can you leverage it as an export base at

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<v Speaker 2>a time of threatened and realized terraffs?

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<v Speaker 3>I think so, provided we get the right scale to

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<v Speaker 3>be competitive, it could be for certain markets. But we

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<v Speaker 3>also have to improve in the domestic market by having

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<v Speaker 3>the right products that the Chinese consumers like, by having

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<v Speaker 3>the right position in the right distribution, and definitely the

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<v Speaker 3>competitiveness in terms of a price that the Chinese consumer

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<v Speaker 3>is looking at.

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<v Speaker 2>How can you compete against a company like BYD, which

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<v Speaker 2>is vertically integrated. It i think makes its own batteries

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<v Speaker 2>about eighty percent of its own batteries. It has the scale.

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<v Speaker 2>I mean a lot of these car makers are not profitable,

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<v Speaker 2>and that's a political issue as well. It's causing political

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<v Speaker 2>waves abroad. But how do you compete on price and

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<v Speaker 2>scale in a market that is dominated by the local players.

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<v Speaker 4>Well, we are competing the facto.

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<v Speaker 3>One thing is to compete, It depends on the market

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<v Speaker 3>position and well thing is to compete in China itself

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<v Speaker 3>where at the moment the local Chinese are doing a

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<v Speaker 3>better job than basically anybody else in other markets fairly

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<v Speaker 3>though nobody really knows. But we do our best within

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<v Speaker 3>the rules always. But I would say in other markets

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<v Speaker 3>like Europe, well we have them as a competitor and

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<v Speaker 3>we do better than them. You go, for example Brazil

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<v Speaker 3>Latin American markets, we just finished the year we became

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<v Speaker 3>number four when the Chinese have sold more cars in

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<v Speaker 3>Brazil than ever in the history. So we are the

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<v Speaker 3>competing with them, and that they are not a shortcuts,

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<v Speaker 3>They are not tricks that you can apply. So you

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<v Speaker 3>need to be very consistent in terms of having the

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<v Speaker 3>right economies of scale, having a good quality production capabilities

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<v Speaker 3>at good cost.

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<v Speaker 2>Let's talk about the local situation here right now. Obviously

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<v Speaker 2>there's some political unrest here in South Korea with President

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<v Speaker 2>un under fire has been impeached. There's a lot of

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<v Speaker 2>political uncertainty right now in the presidential office. How is

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<v Speaker 2>that potentially going to impact consumer sentiment and as well,

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<v Speaker 2>it's hit the one quite a bit.

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<v Speaker 3>First of all, well, I'm not in the politics in

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<v Speaker 3>any market, and also not in Korea. We're watching carefully obviously,

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<v Speaker 3>and then we're focusing on our business, where we have

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<v Speaker 3>not seen any impact so far. We continue to focus

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<v Speaker 3>on delivering the customer promise and then hopefully this will

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<v Speaker 3>be clear very soon. Meanwhile, we focus in every single

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<v Speaker 3>market doing our very best for our consumers.

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<v Speaker 1>That was Hyundai CEO Jose Muno speaking with Bloomberg's Steven

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<v Speaker 1>Engel