Hyundai Motor Group (HMG), including Hyundai Motor and Kia Corporation, said it planned to build a new software research centre in Silicon Valley, California, according to local reports citing sources within the group.
As vehicles become smarter and more connected, software accounts for an increasing proportion of their overall cost. HMG and other automakers are now moving rapidly towards the development of software defined vehicles (SDVs), whereby vehicles can be differentiated and upgraded through software.
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An HMG official said in a statement: “Software is expected to become a key battleground in the auto industry. It is not an option but a must for Hyundai to establish a research centre in Silicon Valley.”
Hyundai Motor CEO Chang Jae-hoon told shareholders at the company’s annual general meeting earlier this year one of the company’s main objectives for 2024 was to speed up its software defined vehicle (SDV) strategy.
The group also announced planned to hire 80,000 new employees in the next three years, including 44,000 in vehicle electrification, SDVs and carbon neutrality.
HMG sources said the new software centre in the US would help accelerate the development of software defined vehicles (SDVs) with the automaker hoping to attract top software engineers with experience with US Big Tech companies in the region.
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By GlobalDataThe research centre was expected to focus on developing new technology to be used in vehicles that will go on sale in five to 10 years’ time. It would be headed by Song Chang-hyeon, the current head of the group’s software and advanced vehicle platform (AVP) operations, and also CEO of 42dot Inc.
The group believes its future depends on the success of SDVs which are equipped with differentiated software such as smart operating systems (OSs), interesting infotainment systems and safe autonomous driving algorithms.
The competition in the world’s SDV sector is intensifying as global electric vehicle (EV) leaders such as BYD and Tesla, as well as tech behemoths, including Huawei Technologies, rushed to develop software for the automobiles.
The global SDV market was forecast to grow 54.9% to US$419.7bn by 2028 from $270.9bn last year, according to industry tracker MarketsandMarkets Research.
Hyundai Motor Group is one of a few global automakers with their own OSs along with Toyota Motor and Volkswagen. The South Korean carmaker, however, is considered to lag behind Tesla and Chinese companies such as BYD and Xiaomi in infotainment systems and self driving algorithms.
The group’s executives including the CEO were reportedly shocked by the software technology of Chinese EV makers showcased at the Shanghai auto show in April, according to industry sources in Seoul.
The planned Silicon Valley research centre was expected to change the group’s research and development (R&D) works, industry sources said.
The auto conglomerate’s R&D organisation currently consists of software, hardware and design units.
The hardware division handles the development of vehicles, hydrogen fuel cells and electrification technology, while the software department is led by the AVP unit.
Hyundai Motor Group was likely to adjust technology developed by the Silicon Valley center at the AVP unit and 42dot for actual use for final installation at the group’s Namyang R&D Center in South Korea, the heart of its global research network, industry sources said.
