“Beijing Hyundai’s first Chinese head steps down after just one year in office.”

(Shanghai = Yonhap News) Correspondent Cha Byeong-seop = As Hyundai Motor Company's slump continues in China, the first Chinese general manager (chief executive officer) of Beijing Hyundai (Hyundai Motors China joint venture) is said to be stepping down after about a year in office.

Chinese media outlet Cheil Finance reported on the 30th (local time) that General Manager Li Pengkang, who took office on November 10 last year, is scheduled to retire on the 1st of next month, citing internal sources at Beijing Hyundai.

The source claimed, "This is not a simple personnel change. Behind it, there are differences of opinion between Korean and Chinese shareholders regarding Beijing Hyundai's development path."

He continued, "Beijing Hyundai has not been able to agree on key agenda items such as management goals and cost reductions over the past year, and localization reform has been difficult," and "Li Penggang, the first Chinese general manager, stood at the crossroads of conflict."

Beijing Hyundai is a joint venture established in 2002 by Beijing Automobile Investment Co., Ltd. and Hyundai Motor Company with capital of 5:5.

Under the agreement, the Korean side appoints a general manager and the Chinese side appoints a managing vice general manager, and General Manager Lee, who graduated from Tsinghua University and has over 20 years of experience in the automobile industry, was the first Chinese person to serve as general manager.

There was also an interpretation that this was in accordance with the 'localization of management' strategy of CEO Jose Muñoz, who became the first foreigner to hold the position of global CEO at Hyundai Motor Company.

However, the source claimed, "In the management system dispatched by Korea, the Chinese side's recruitment of personnel was limited, and key positions were still mainly held by Koreans," and "In terms of work, General Manager Lee's actual authority to allocate resources and lead decisions did not match his title."

Cheil Finance also reported that although Korea and China must reach an agreement when making major decisions, no substantive discussions have taken place at the Beijing Hyundai board of directors for a year.

Under these circumstances, Beijing Hyundai's sales in the first half of the year amounted to only 94,000 units, down 5.3% from the same period last year.

Cheil Finance said, "Localization of management means that the positions and jurisdictions of existing Korean managers are readjusted, and internal competition ensues. Products and technologies can be localized, but policy-making authority is not so easy to localize."

On the other hand, according to another Chinese media outlet, the Maeil Business Newspaper, quoting another insider, it said that it was true that General Manager Lee was resigning, but made a conflicting claim, saying, "It is due to personal reasons. Internally, we are very accepting of the actions he took during his tenure."