▲The 4th Asset Management Event (from left) Jeon Jong-geun, President of the Korea Automobile Industry Association, Lee Hang-gu, President of the Automotive Convergence Technology Institute, Hong Seong-su, Professor at Seoul National University, Lee Jeong-moon, Team Leader at LG Electronics, and Jang Moon-soo, Research Fellow at Hyundai Motor Securities


Hanjayeon, '4th Asset Report' held... 2024 macro outlook and response strategy topic
“Relegated to OEM Tier 1… Will inherit the power of software and service companies”
“Human resource development project in progress but professional workforce decreases… Most production workers are foreigners”

Experts in the automobile industry pointed out the ongoing manpower problem in the automobile industry, along with the opinion that small and medium-sized enterprises should focus on SDV rather than CASE, which is the keyword for mobility technology.

At the 4th Asset Report event hosted by Hanjayeon at COEX Startup Branch on the 21st, Professor Hong Seong-soo of the Department of Electrical and Information Engineering at Seoul National University and Director Lee Hang-gu of the Automotive Convergence Technology Institute discussed the topic of the mobility industry settlement and outlook, looking back on the mobility industry over the past year as 2023 comes to a close, and talked about the macro outlook and response strategies for 2024.

Professor Hong Seong-su repeated the story that President Na Seung-sik of the Korea Automobile Research Institute had told in his opening speech, “The one who survives is strong,” and said, “In order to survive 10 or 20 years, surviving next year should be the priority.He emphasized, “We need to think about what R&D to choose in the short-term future.”

Professor Hong criticized, “When we look critically at CASE, which has been considered a representative keyword in the mobility market since 2013, we see that nothing has been tangible.”

CASE is Connectivity, Autonomous Driving, Sharing, and Electrification.

In the case of our country, the communication method has only just been decided as LTE-V2X, and although communication-related companies are rushing to build on 5G, there are no tangible services, and industrial expectations for autonomous driving are also low despite active demonstration projects.

Professor Hong expressed his view that, “Not only are there no services derived from Shared, but there is no one to buy it, and in the case of electrification, if LFP batteries that are being poured out as a low-cost strategy are not recycled but thrown away, there is a limit to whether they can be called eco-friendly vehicles.”

Ultimately, this means that the bright future 10 years from now as seen from 2013 has not yet been achieved.

Professor Hong Sung-soo said, “The government and institutions like the Korea Automobile Research Institute have an obligation to study CASE, but small and medium-sized companies that need to survive next year do not,” adding, “Auto parts companies need to seriously consider moving away from products and selling software.”

He predicted that if SDV takes hold, OEMs that held absolute power would be relegated to Tier 1, and software and service companies would take over the power.

thisIt is in line with the content of the webinar 'Latest Trends in SDV Architecture' held by e4ds news and Vector Korea on the 8th.

Kim Eui-yeol, head of the business division of Vector Korea, who appeared as a speaker, said, “OEMs will act as software experts and play a role in HPC integration, and the existing Tier 1s will likely act as 0.5 Tier that supplies complete platforms, or as 1.5 Tier that supplies software or parts of hardware.” He added, “The existing Tier 2s may become 1.5 Tiers by forming partnerships with OEMs without going through Tier 1s, and new players such as tech companies Amazon and Google will act as Tiers 1 or 2.”

Hong Sung-soo said that while there is a possibility that the market could change completely if Donald Trump is re-elected as US President and the promotion of electric vehicles is halted, the software, such as driver gesture recognition, will remain robust, and stressed that now that SDV pilot services are appearing one after another, it is important to create services that customers are willing to pay for.

The head of the Lee Hang-gu Automotive Convergence Technology Institute expressed his concerns about the labor shortage in the automobile industry and emphasized that we must break away from the illusion brought about by Hyundai Motor Company's high profitability.

Although a human resource development project worth 1 trillion won is being carried out at universities and other institutions, the number of specialized personnel is actually decreasing, and with Hyundai Motors accounting for 78% of the 10 trillion won invested in R&D, the country's dependence on Hyundai Motors is increasing.

Director Lee Hang-gu cited the fact that the amount invested in non-affiliated companies unrelated to Hyundai Motor Company is only about 3 trillion won, which is only one-third of the annual R&D cost of Bosch in Germany, as a reason for the inability to move forward with the transition to future vehicles.

He continued, “From the second half of 2024, Dosanha willHe spoke about the analysis of the Korea Automobile Convergence Technology Institute that the number of small and medium-sized enterprises will increase significantly, and expressed concern that although the average operating interest rate of parts companies this year has increased slightly, it is the worst time when the interest coverage ratio is not even enough, and reinvestment is virtually impossible.

Additionally, most of the on-site production personnel are foreigners.

Considering the frequent job changes among foreign workers, Director Lee Hang-gu predicted that quality issues would eventually become a problem.

He emphasized that we must prepare now because quality problems in parts manufacturers, which are the backbone of automobiles, can spread to problems throughout the entire supply chain, and that policies that can build a foundation for sustainable growth are absolutely necessary.

Meanwhile, the Jasan Eobo event hosted by Hanjayeon is an abbreviation for 'Uniting and Supporting the Automobile Industry' and is a regular networking event in the mobility industry that aims to share useful information and expand collaboration among members based on regular meetings and exchanges among members of the mobility industry.