Hyundai, Kia Set Up Regional HQs in Major Markets

Hyundai Motor Co. and its Kia Motors affiliate plan to launch regional headquarters in Europe and North America on July 2 in a bid to boost sales and give the markets more autonomy.

Hyundai says the sweeping decentralization plan aims to generate sustainable growth and improve innovation. The two brands intend to add more local headquarters next year as they complete the global reorganization.

The new offices will be responsible for everything from product planning and marketing to sales and production. The regional headquarters all will establish their own staffs to handle planning, finance, product and customer experience functions.

Until now, Hyundai and Kia have operated through a highly centralized management structure. But sales have been hobbled by a product mix that fell out of step with the worldwide shift in demand from cars to SUV/crossover vehicles. The restructuring also comes as the carmaker faces heavy pressure from activist hedge fund Elliott Advisors Corp. to simplify its complex ownership structure.

The decentralization plan began last October when Hyundai set up a Global Operations Division in Seoul. That unit will be headed by Hyung-cheong Kim, who most recently was president of Hyundai Europe.

Hyundai’s North American headquarters will be led by Yong-woo Lee, previously chief of Hyundai operations in Brazil. The European headquarters will be headed by Dong-woo Choi, who has been running European operations from Seoul.

Hyundai also will establish a regional headquarters for India. The unit will be led by Young-ke Koo, currently managing director of Hyundai Motor India.

Kia is mirroring regional headquarters in North America and Europe to be headed by Byung-kown Rhim and Yong-kew Park, respectively. Kia’s plans for India were not announced, but it also plans to create more regional offices in 2019.