Hyundai Motor Shares Jump After Reports of Defense Business Consolidation

By Kwanwoo Jun

Hyundai Motor's shares advanced after media reports that two of its affiliates are considering consolidating their defense businesses, a move that, if confirmed, could boost the efficiency of South Korea's largest auto group.

The rally followed overnight reports by the Korea Economic Daily and other local media, citing unnamed sources, that armored-vehicle manufacturer Hyundai Rotem is weighing an acquisition of Hyundai Wia's defense division that makes gun barrels for howitzers and tanks. Hyundai Motor has controlling stakes in both companies.

The car maker's stock climbed as much as 7.1% to 544,000 won in early Seoul trading, outperforming the benchmark Kospi's gain of around 2%.

Responding to the reports, Hyundai Rotem and Hyundai Wia said in separate regulatory filings Thursday that they are reviewing various measures to strengthen business competitiveness, but that no specific decisions have been made. The companies said they will provide an update within a month. Hyundai Motor officials weren't immediately available for comment.

Daishin Securities analyst Kim Gwi-yeon views Hyundai Wia's potential divestment of its defense division as beneficial to the efficiency of its parent auto group, valuing the deal at around 370 billion won to 880 billion won, equivalent to a range of $250.8 million to $596.5 million.

Hyundai Wia could use proceeds from the deal to sharpen its focus on its thermal management system and robotics businesses for the parent group, Kim said.

"It can be seen as a process of divesting low-growth businesses and reallocating capital to mid- to long-term growth areas," DAOL Investment & Securities' J.W. Yoo said in a research note. The analyst also pointed to the auto group's restructuring strategy aimed at boosting its sales of electric vehicles and hybrid cars.

Yoo said the potential sale of the defense business will help Hyundai Wia secure investment funds, citing the company's plans to grow its thermal management business 10-fold to 1 trillion won by 2030 and its robotics business fourfold to 400 billion won by 2028.

Hyundai Motor in February unveiled a 9 trillion won investment plan centered on physical artificial intelligence and robotics in South Korea.

Hyundai said that more than 60% of the total investment would be used to build an AI data center to support autonomous-vehicle development. The investment would also fund plants for robot components, hydrogen production and solar power. Boston Dynamics, an affiliate of Hyundai Motor Group, plans to deploy its Atlas humanoid robots at auto plants from 2028 and aims to produce 30,000 units globally each year.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

April 16, 2026 01:40 ET (05:40 GMT)