Mando outlines EVs and AVs strategy
Halla-owned Mando to advance into 'EV Solutions' and 'Autonomous Driving' alongside re-org that will split off ADAS division.
Mando, a subsidiary of Halla Group, has announced its vision to achieve 9 trillion KRW in revenue by 2025 through advancing into two core businesses, ‘EV Solutions (electrified chassis products and with new xEV related businesses)’ and ‘Autonomous Driving (ADAS & mobility solutions)’. This will entail a break-up of the company into two separate companies.
The key strategies are 1) Existing Co. (Mando) will grow as a highly-focused EV solutions company through chassis (brake, steering, suspension) electrification, and 2) New Co. (MMS) will split-off from Mando and be positioned as a ‘specialized autonomous driving & mobility company’.
Mando announced on June 9th 2021, that its Board of Directors approved the company’s plan to split-off its ‘Autonomous Driving (ADAS)’ business. The split-off plan is expected to be presented at the shareholders’ meeting to be held in July 2021, and the split-off transaction is to be completed on September 1st 2021, following regulatory requirements.
Existing Co., the parent company of the New Co., will maintain its managerial control over the New Co. to create synergy between the two entities and will strengthen its position as an ‘integrated chassis system solutions leader’. Moreover, it plans to expedite the growth of the New Co.’s autonomous driving businesses through timely financing structure.
“MMS (Mando Mobility Solutions)-tentative”, the New Co., will emerge as a specialized autonomous driving solutions provider within fields of autonomous vehicles parts, autonomous robots, and mobility services. To create business synergy for autonomous driving, MHE (MANDO-HELLA Electronics) will become a wholly owned subsidiary of MMS. Also, revenue and profits of MSS and MHE will be fully reflected in Existing Co.’s financials. MMS and MHE are aiming to achieve 2 trillion KRW in revenue by 2025′, which is an increase of 800 billion KRW from that of the 2021 business plan.
Mando, the Existing Co., aims to become a highly-focused EV solutions company by leveraging its business experiences with global leading EV companies and through advancement of software solutions. The core business pillar of Existing Co. is electrified chassis products (brake, steering, suspension), and xEV specialized products such as e-Drive (engine) for EVs , e-Corner Module (integrated module of electrified chassis), and hydrogen car battery charging converter are under the development. Existing Co.’s target revenue by 2025 is 7.4 trillion KRW, which is an increase of 2.2 trillion KRW from that of 2021 business plan. Total revenue of Existing Co. and New Co. in 2025 is expected to reach 9 trillion KRW on a consolidated basis (removing intercompany transactions), which is an additional growth of 3 trillion KRW from 2021 business plan (6.1 trillion KRW).
Cho Seong-Hyeon, Mando’s president & representative director, has stated that “specialization of core businesses is inevitably required for Mando to actively respond to the rapidly changing market,” and that “we will make every effort to maximize shareholder value by fully recognizing values of Existing Co. and MMS as sharply-specialized companies”.
Mando's re-org illustrates the pressures on major supplier companies to become more specialised and focused in meeting the growing demands from OEMs for capabilities in advanced and emerging technologies. Such restructuring is seen as a strategic option to achieve this.
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