Hyundai Motor Group said Wednesday it has set up a new research and development division in its push for software-defined vehicles by combining several teams across the auto giant's affiliates.

The Advanced Vehicle Platform Division integrates three software development units -- its in-house SDV division and two separate teams at the carmaker’s research centers.

Other teams working on the next-generation automotive platform and software that used to be under the leadership of the carmaker’s chief technology officer will also join the new division.

The new division will be headed by Song Chang-hyeon, who has doubled as the head of the former SDV division and 42dot, Hyundai’s latest subsidiary specializing in mobility software.

Hyundai acquired 42dot, a startup founded by Song, for 427.6 billion won ($317.7 million) in 2022.

42dot was not part of the recent reshuffle, but it plans to work closely with the software branch as one team, according to a company official.

As for hardware, the existing division has been revamped to focus on commercial production and new car launches. Yang Hee-won will head the research and development division

Industry insiders say the recent shake-up centering on drastic changes to software development signals the carmaker’s commitment to accelerate the shift to SDVs.

“Hyundai needed to speed up the decision-making process and elevate operational efficiency overall when it comes to software development,” said an industry source close to the matter.

The source added there have been subtle pushbacks within the company on the latest reshuffle, given that it has largely been driven by hardware and machinery people.

“But given changing tides among carmakers, employees would have to accept the irreversible paradigm shift from hardware to software in future mobility.”

The group’s Executive Chair Chung Euisun is also keen on the software mobility business. In recent occasions, including last week’s CES in Las Vegas, he expressed concerns that the carmaker could fall behind rivals if it is not firmly ready for the heated software race.

Experts say the recent reshuffle also reaffirms Chung’s bold leadership to name a top executive outside the company like Song, who started his career in Naver.

“Chung has always recognized the limitations of in-house personnel, especially when it comes to ushering in a profound business change,” said Kim Pil-su, a car engineering professor at Daelim University. “For carmakers, right now, the pinnacle of research and development is software. Those who fail to build algorithms powered by artificial intelligence will run out of business.”

Kim added Chung has given more power to Song, a software expert, to lead the way toward a mobility revolution -- far more drastic change than innovation.