SEOUL (Reuters) – Hyundai Motor Group appointed heir apparent Euisun Chung as chief vice chairman on Friday, moving him a step closer to succeeding his father as head of South Korea’s second largest conglomerate.
Hyundai Motor Group Vice Chairman Chung Eui-sun attends the company’s new year ceremony in Seoul, South Korea, January 2, 2018. REUTERS/Kim Hong-Ji
Chung, 47, who will assist his father and group chairman Mong-Koo Chung, was promoted to respond to “deteriorating global trade issues and changes in competitive dynamics in major markets,” Hyundai Motor Group said in a statement.
Chaebols like Samsung Group, which have grown into global firms from the rubble of the 1950-1953 Korean War, are undergoing a transfer of power to third- or fourth-generation leaders.
“In his new capacity, Chief Vice Chairman Euisun Chung will oversee the entire Group’s operations, aiding and reporting to Chairman Mong-Koo Chung,” a Hyundai Motor Group spokesperson said.
The younger Chung was vice chairman of the conglomerate’s crown jewel Hyundai Motor Co (005380.KS) since 2009.
ES Chung has attended government meetings with business leaders in recent years, replacing his 80-year-old father who now makes few public appearances.
MK Chung, the all-powerful boss, has presided over Hyundai for about two decades, transforming the company into the world’s fifth-biggest carmaker along with affiliate Kia Motors (000270.KS).
Hyundai is now struggling to reverse slowing sales in China and the United States, where the company has suffered due to its delayed response to booming demand for SUVs.
The appointment is part of an effort to “improve future competitiveness and secure future growth engines” at a time when the auto industry is undergoing major changes, the group said.
The junior Chung has led the group’s efforts to develop future vehicles such as autonomous and connected cars, as well as Hyundai’s fledging premium brand Genesis.
“Hyundai Motor will actively try to transform itself from a car manufacturer to a provider of smart mobility solutions,” Chung said in a speech at a forum in India last week.
A major challenge for ES Chung will be how to consolidate his holdings in the group.
Hyundai Motor Group in May shelved an ownership restructuring plan that would have tightened the family’s grip and paved the way for a succession. The plan had been opposed by U.S. activist hedge fund Elliott Management..
South Korea’s government has called for reform of the country’s family-owned conglomerates, known as chaebols, in the wake of a graft scandal that led to the ouster of a president, as well as the arrest of the Samsung Group chief.
Reporting by Hyunjoo Jin; Editing by Darren Schuettler