Reaching Hyundai’s seven-storey facility in Singapore’s Jurong industrial district can take up to an hour and a half, a significant amount of time in a densely populated city. However, customers who make the drive are greeted by an unusual sight for a car factory: a high-end Korean restaurant.
“Na Oh,” meaning “moving from inside out” in Korean, is a testament to Hyundai embracing its Korean heritage. The restaurant’s menu, which changes seasonally, is consulted on by Corey Lee, a three-star Michelin chef based in San Francisco. Additionally, there is a vertical farm where visitors can plant a variety of seeds, with the produce used to supply the restaurant.
These facilities are unique attractions within Hyundai’s Innovation Center, which the Korean automaker launched in November. The center is part factory, part farm, part research lab, and part restaurant.
However, the primary focus of innovation at the Hyundai Motor Group Innovation Center Singapore remains on cars.
A New Kind of Factory
Hyundai currently assembles the Ioniq 5 and 6, battery EVs, in Singapore for the domestic market, as well as the self-driving robotaxi variant bound for the U.S. The Singapore facility can produce up to 30,000 vehicles annually.
Traditional car plants are typically massive, sprawling complexes. While Hyundai’s Singapore plant is large by the city’s standards, it is more modest in scale.
Building a car plant in a location where land is at a premium necessitates a different factory layout. At the Innovation Center, assembly takes place on the third floor. Robots assist engineers with almost every task, from transporting parts to fitting them onto the chassis and even conducting quality inspections.
Alpesh Patel, chief innovation officer at HMGICS, believes the concepts used in Hyundai’s plant could serve as a model for other urban micro-factories. “Scarcity is equally applicable to a large city. Even in a very large country, the price of land is much higher than outside of town,” he explains.
Patel joined Hyundai after working with Ferrari as an aerodynamicist for the Italian carmaker’s Formula One cars. The elite race-car circuit is renowned as the forefront of auto innovation, and the technology required to make an F1 car is expensive.
However, this technology eventually trickles down to the mass market.
“The cost of computing power is significantly lower than it used to be when I was in F1. We can start doing more and more things,” Patel says, such as identifying pain points on the shop floor.
Why Singapore?
Hyundai’s executive chair, Euisun Chung, advocated for the innovation center to be based outside of the company’s home base of South Korea to inspire new ways of doing things.
Singapore was the top candidate for this 700 billion won ($505 million) project due to its good infrastructure, supportive government, and available talent, according to Patel. Importantly, the smaller market size allows Hyundai to experiment with new methods.
The Southeast Asian city is not a large car market compared to its neighbors. Just over 30,000 passenger cars were sold in Singapore last year; Malaysia, next door, sold almost 720,000 passenger cars, more than 10 times higher. (Population-wise, Malaysia is six times larger than Singapore.)
Hyundai has room to grow in Singapore’s small car market. Hyundai ranked 8th in the top ten car brands sold in Singapore last year, with its EV sales trailing China’s BYD, Tesla, and BMW.
Patel believes that a facility like Hyundai’s Innovation Center can eventually be used for final assembly, allowing for more customization according to location and even individual customer preferences.
“If we want to produce the right personalized vehicles for the right population mix, then we need to bring manufacturing activity closer to the urban environment,” he says.
This story was originally featured on Fortune.com.
