Hyundai Motor Explores UAM Factory Sites...Expectations for Domestic Attraction Rise

Hyundai Motor Group Targets UAM Commercialization by 2028
Government Plans Domestic UAM Introduction from 2025
Urgent Need for Aircraft Development, Certification, and Production System Establishment
High Possibility of Domestic Attraction Considering Initial Mass Production Quality
Growing Expectations for Hyundai's Production Base in Ulsan and Aerospace Parts Cluster in Sacheon

[Asia Economy reporters Su-yeon Woo and Je-hoon Yoo] As the urban air mobility (UAM) business, regarded as the core of future mobility, gains momentum, interest in Hyundai Motor Group's UAM production sites is also increasing. Experts believe that Hyundai Motor Group is highly likely to establish production facilities domestically to manage initial mass production quality, with Ulsan, Hyundai's largest production base, or Sacheon in Gyeongnam, where an aviation parts cluster has been formed, being considered strong candidates.

According to the industry on the 31st, Hyundai Motor Group is targeting 2028 for UAM commercialization and is currently scouting production sites. This plan is somewhat conservative compared to the government's roadmap, which plans introduction in 2025 and activation of 10 routes by 2030. If the plan proceeds as scheduled, Hyundai Motor Group will need to start full-scale mass production of personal aerial vehicles (PAVs) in as soon as five years or at least eight years. Considering the schedule for aircraft technology development, certification, site selection and completion of facilities, and the start of mass production, the timeline is somewhat tight.

Earlier this year, Hyundai Motor Group unveiled the concept of the vertical takeoff and landing PAV 'S-A1,' capable of flying up to 100 km, in partnership with strategic partner Uber. This PAV is scheduled for pilot operation first in the United States in 2023, and Hyundai is the only global automaker that has formed a strategic alliance with Uber for PAV development.

Once the rough technology development is completed, Hyundai Motor Group is expected to focus all efforts on building a production system leveraging its characteristics as an automaker specialized in mass production. Earlier, Hyundai Motor Group's Executive Vice Chairman Euisun Chung mentioned that Hyundai's future portfolio would consist of 50% automobiles, 30% PAVs, and 20% robotics, and Hyundai's ultimate expectation is to lead UAM mass production targeting the global market.

Expectations for Hyundai Motor's UAM Factory to be Located Domestically

Experts view the possibility of Hyundai Motor Group establishing a UAM factory domestically as high. While the United States is also mentioned considering initial market demand, the analysis suggests that the Korean market is likely for enhancing the completeness of initial mass production quality. In particular, Ulsan and Sacheon in Gyeongnam are cited as strong candidates. If Hyundai utilizes existing factories to build initial small-volume production lines, Ulsan is favored; from a long-term perspective, if aiming to create an aviation manufacturing cluster, Sacheon, where aircraft parts companies are gathered, is also considered.

The industry sees Korea's competitiveness as sufficient from a technical standpoint since UAM production technologies such as motors, batteries, and material lightweighting are extensions of electric vehicle production. Although UAM's core technologies number about 650, 15 times that of automobiles, creating a high entry barrier, successful production promises much higher added value.

However, the decline in productivity in Korea's automobile manufacturing industry poses a significant obstacle to attracting UAM factories domestically. Due to rigid labor-management relations, rapid minimum wage increases, and the introduction of the 52-hour workweek, productivity in domestic automobile factories over the recent eight years (2011?2018) has fallen to about half that of Germany. To attract high value-added UAM factories domestically, independent efforts to improve productivity compared to global competitors appear necessary.

Ahn Young-soo, Director of the Defense Industry Center at the Korea Institute for Industrial Economics and Trade, said, "If UAM technological capability is considered the most important competitive factor, it is advantageous to establish factories on home ground where direct control such as initial quality management is possible," adding, "I understand that all current development personnel are based in Korea." Ko Tae-bong, Head of Hi Investment & Securities Center, also analyzed, "UAM production can be a 'game changer' for both domestic automobile and aircraft industries and is an opportunity not to be missed," noting, "Given the many overlaps with electric vehicle-based autonomous driving cars and production processes, Korea's potential is sufficient."

Slow Progress in Institutional and Infrastructure Development... Control Tower Needed

While UAM aircraft development is gradually taking shape, the pace of institutional and foundational technology development is slow. This is because unified standards related to operation and infrastructure have not been established domestically or internationally. This is why advice is emerging that a close cooperation system among private sector, government, and academia must be established separately from production facilities.

For example, an air traffic control system is necessary for urban airspace operation but is still in the research stage. Currently, airspace above 1000 meters, where commercial aircraft operate, is controlled by Air Traffic Management (ATM), and below 150 meters, where helicopters and drones operate, an Unmanned Aircraft System Traffic Management (UTM) system is under development. However, control measures for the 300?600 meter altitude, where UAM is expected to mainly operate, remain undecided. An industry official said, "Since hundreds to thousands of drones and air taxis will operate below 1000 meters in the future, the integration of UTM and UAM systems is currently being shaped."

Building infrastructure such as terminals (Veriports) is also an urgent task but progress is slow. For pilot project operation in 2025, site selection, design, and construction must proceed sequentially soon, but concrete procurement plans and technology are still unclear. The government plans to prioritize private capital for urban terminal construction and has drawn a blueprint to actively utilize helipads on building rooftops for vertical takeoff and landing of helicopters and drones.

Regarding urban terminals, except for some sites like the International Business District (GBC), there is a lack of available vacant land or large buildings, which is the biggest challenge. There are concerns that infrastructure construction in expensive urban areas may not be easy with private capital alone. A Ministry of Land, Infrastructure and Transport official said, "Realistically, there will be limits to building terminals and infrastructure with private capital alone," adding, "The government, local governments, and public institutions need to proactively consider this from the urban planning stage."

There are also technical limitations. Utilizing existing building helipads is a representative example. An industry official said, "Even if trying to build terminals or use helipads, it remains unclear what loads act during UAM takeoff and landing and what construction methods are required."

Airspace issues also need resolution. Currently, major airspace over northern Seoul is designated as a no-fly zone (P73) by the military. Therefore, routes connecting Incheon and Gimpo International Airports to Gangnam face no major issues, but major sections such as Jongno, Gwanghwamun, and Seoul Station are off-limits. However, it is reported that the military has recently shown a more positive stance regarding this.

Since many challenges remain uncertain, there are calls for a control tower capable of thoroughly promoting cooperation among central government, local governments, related ministries, and public-private sectors. Another industry official said, "In the UAM field, benchmarking advanced trends as well as convergence across aircraft development, operation, communication, and civil engineering is essential," adding, "For this, smooth collaboration among stakeholders is necessary, and a control tower to lead this should be established."