Hyundai will quit the World Rally Championship at the end of the season to return with a new programme in 2006.
Hyundai are languishing this year
The Korean carmaker unveiled their plans on Wednesday and expressed their regrets at having to pull out.
"Withdrawing is a painful decision but also a realistic admission that a break is absolutely mandatory for us to reorganise and rethink our entire approach to motorsport," said a spokesman.
"But we'll be back in 2006 in fighting form with a completely new engine and car to mount a more credible challenge for the WRC crown."
Hyundai will set up a new rally headquarters at Russelsheim in Germany as part of a reorganization.
And they plan to return for the second half of 2006 and for a full season in 2007.
Their drivers this year are Belgian Freddy Loix and Germany's Armin Schwarz.
But the team are languishing in last place in the championship with 12 points, well behind joint leaders Citroen and Peugeot.
Former champions Mitsubishi quit rallying at the end of 2002 to restructure and are due to return next year.