Hyundai probably would have been the target of every automotive joke throughout the late 1980s and early 1990s if it weren’t for the Yugo’s disastrous stint on the American auto market. Excel was a bad, very unreliable program that was best at crushing the Korean automaker’s attempt to enter the American market before it even started. Through the 1990s, sales fell and eventually plateaued. Then, in 1998, Daewoo made an even more disastrous entrance (and subsequent faceplant) into the American market, putting the very notion of a Korean automaker in danger.
From the brand’s peak a decade earlier, Hyundai’s yearly U.S. sales had fallen to roughly 90,000 vehicles by 1998, a decrease of more than 170,000 units. However, 1998 also saw Hyundai acquire Kia and start to emerge from the hole it had dug for itself. At least initially, it wasn’t based on a stunning product. Instead, the much-publicized 10-year/100,000-mile powertrain warranty served as image repair. Sales increased, giving Hyundai more time to make small adjustments to their cars—a move that would lay the groundwork for longer-term success. In the early 2000s, auto critics portrayed Korean automakers as the protagonist of a Horatio Alger tale. Even though everything was exaggerated, at least some of it was based in reality.
But nowadays, Korean automakers may succeed without being evaluated on a curve. The cars from Hyundai, Kia, and more lately Genesis aren’t merely affordable and of good enough quality. They have advanced up the value chain, to use business terminology. Korean automobiles, including those made by Samsung and LG and other Korean businesses, are increasingly really coveted. Hyundai/Kia/Genesis is having success after success with everything from high-end sports sedans to sporty hatchbacks to battery-electric models.
You can create a potential juggernaut that was unthinkable when the Excel clattered onto the scene more than 30 years ago by combining the industrial might of Korea’s vertically integrated megacorporations with the rising interest in Korean pop culture and the willingness of Hyundai/Kia/Genesis to poach the best design and engineering talent from around the world. The world of automobiles has taken a bullet from K-pop.
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managing strategically and the secret
Though it all seems quite straightforward, few brands really implement it. Deep understanding of what a specific market need and at what cost is the key to Hyundai’s success. Maruti was and still is their biggest rival when they entered the Indian market. However, Hyundai only produced two little automobiles, which were ideal for India’s challenging and congested roadways. People were willing to buy their first Hyundai in India instead of a Maruti at a low price with a modest margin for Hyundai on one of the vehicles. The Hyundai Accent, the other vehicle, had a better profit margin for Hyundai but was viewed as less desirable by Indian consumers. Surprisingly, the public took to both models and loved them.
As previously indicated, they used an entirely different strategy when they entered the US market. It applied to the European market as well. For the congested European streets, they offered more smaller automobiles. They set the price in a manner that was comparable to what French automakers set for their compact cars, but they provided significantly longer warranties.
The perception of Hyundai changed throughout time.
Back in 1947, when the Hyundai brand was first established, it was a construction and engineering firm. But eventually, in 1986, the Hyundai Motor Company made its debut in the United States with the release of the Hyundai Excel, a compact two-door hatchback that was actually based on the Mitsubishi Mirage. From there, the company moved on to develop the Sonata sedan. Time proved that the Korean brand could finally establish itself, despite the fact that the automobiles they created were quickly written off as being inexpensive or even exact replicas of other models.
By producing its own engines and transmissions and advancing its car designs, the brand achieved technological independence in 1991. However, around this point Hyundai began to gain a reputation for building subpar automobiles, which is why they began providing its 10-year/100,000-mile powertrain warranty. The company kept up its global expansion and product updates during the rest of the 1990s to compete with companies like Honda and Toyota. Thanks to its distinctive product portfolio and the value it added to the market after the turn of the century, Hyundai began to establish a much better reputation both internationally and in the United States.
Progress of Hyundai Motor Company
The Hyundai Engineering & Construction Company established the Hyundai Motor Company as a subsidiary in 1967. In their vehicle manufacturing, the business initially built cars and trucks for the Ford Company. Their first vehicle, the Hyundai Cortina, was created in 1975 in collaboration with Ford Motor Company. With a 2% market share in the global retail market, they rose to the position of 13th largest automaker in the world during the following two years.
The business made the decision in 1975 to create its own automobile, which it would market under the name “Hyundai.” Their first vehicle, the “Hyundai Pony,” was created by five of the top British automobile engineers that they hired. Due to its compact size and reasonable price, the car quickly rose to the top of the sales rankings in South Korea. The Hyundai Pony thereafter arrived on the Canadian market, where it quickly rose to the position of best-selling vehicle. Their output had surpassed 1 million vehicles by 1985.
They first entered the American market in 1986 with the new “Hyundai Excel” vehicle. The high quality and affordable price of this car also contributed to its success as a great seller. More than 160,000 units were sold in 1986, and 260,000 were sold the following year. Hyundai had now made a name for itself as a fierce contender in the global auto market. The medium Sonata, which was their following record, came out in 1988. The American market did not take to this model, but by that time, Hyundai was already producing 4,000,000 cars annually.
Hyundai reorganized by making significant investments in the caliber, design, development, and production of its automobiles. As a result, they developed the first unique four-cylinder gasoline engine with its own transmission, the Alpha. All of their vehicles sold in the United States now come with a 10-year or 10,000-mile guarantee. As a result, their reputation was enhanced and more people began to select Hyundai vehicles over those made by other manufacturers.
With the introduction of top-selling vehicles like the Hyundai Elantra, Hyundai Tucson, Hyundai Santa Fe, and Hyundai Genesis, it continues to enjoy success. Hyundai has won numerous accolades for their cars’ longevity and fuel efficiency throughout the years.
By 1995, Hyundai had established sales in nations like Australia, New Zealand, Egypt, and Japan, where it unveiled models tailored to each nation’s needs. In 1998, Hyundai bought a 51% share in Kia Motors, the country’s second-largest automaker at the time. It had production facilities in Turkey, the Czech Republic, China, Pakistan, and India by the year 2000. More than 2,500,000 devices were sold, generating $56 billion in revenue for the corporation in 2004. Hyundai was the world’s fourth-largest automaker in 2011 with more than 4.04 million vehicles sold, after only GM, Volkswagen, and Toyota.
Hyundai and its affiliate Kia collectively sold more than 7 million automobiles in 2012, selling 4.5 million globally. As of 2013, Hyundai’s factories around the world produced more than 3,000,000 units annually. It generates more than 82 billion dollars in revenue and employs about 75,000 people. Hyundai began in the car sector cautiously and has since developed into one of the most reputable four-wheeler manufacturers worldwide. Hyundai’s success is a result of its ongoing commitment to growth and client happiness.
How Hyundai Motor, which was once on the rise, lost its luster
The manager with the last name Li claimed that despite discounts as high as 25%, his dealership was only selling around a hundred cars a month. According to the store manager of a nearby Nissan 7201.T dealership, 400 vehicles were sold there each month.
Hyundai’s enormous $1 billion manufacturing facility, which launched last year with a goal of producing 300,000 automobiles annually, is located an hour away.
But according to two people with knowledge of the situation, the facility is only operating at about 30% of its potential because of sluggish sales and a dramatic slowdown in the Chinese auto industry. The sources requested anonymity because the material was confidential.
The fifth-largest automaker in the world, Hyundai, declined to comment on the output or sales of the dealership in Chongqing, but stated that it is “closely cooperating” with the local partner BAIC 1958.HK to turn around the China business. An inquiry for comment from BAIC was not answered.
Hyundai’s problems represent a significant turnabout for the automaker, which was an early success story in China as it released popular new models into a booming market rapidly and affordably.
The combined sales of Hyundai and its partner Kia in 2009 were third in China after those of General Motors GM.N and Volkswagen VOWG p.DE.
The South Korean duo is currently ranked ninth, and from more than 10% at the start of this decade, their market share in China has more than halved to 4% last year.
According to executives and industry experts, Hyundai gave up its formerly dominant position in the low-end category to quickly expanding Chinese rivals like Geely 0175.HK and BYD 1211.HK.
They said that overseas competitors harmed Hyundai’s position as an inexpensive foreign brand by maintaining competitive pricing for mass-market models in addition to defending their territory in premium sectors.
Hyundai’s market share in the United States, the second-largest auto market in the world, dropped to 4% last year, which is almost a decade low.
Hyundai: The Five Elements of American Automotive Success
Hyundai Motor Manufacturing aided in accelerating the car industry’s recovery in North America as the United States came out of the severe recession. A Great Manufacturing Story explains how Hyundai has accomplished so much and made so many contributions.
The company’s initial success factor was becoming an American automaker rather than just importing cars. In Montgomery, Alabama, Hyundai invested $1.7 billion in its state-of-the-art assembly facility, which employs 2,500 people. The business also maintains research and development labs in Michigan and California, as well as its headquarters, test track, and warehouses there. Customers recognized Hyundai was committed for the long run by seeing evidence of its commitment to the U.S. market. Hyundai manufactures more than half of the vehicles it sells in this nation today.
Quality and dependability have been the second component. Hyundai has won awards for the quality of its products and offers an industry-leading guarantee on all of its vehicles.
The third factor in the company’s success in North America is product design. Hyundai is aware of the value of fusing style and quality. Californian engineers created the Sonata and the Elantra, which won North American Car of the Year.
The value and fuel efficiency of Hyundai automobiles are the fourth factor in the company’s success in the US. Hyundai is able to produce high-quality, fuel-efficient cars at incredibly low rates because of their innovative workforce and cutting-edge manufacturing infrastructure. The business is committed to fostering and rewarding employee success.
Last but not least, Hyundai’s capacity to remain adaptable in order to foresee and take advantage of market openings represents the fifth key to its development and success. This capacity may be attributed to the company’s workers as well as early decisions that allowed them to build many cars on the same assembly line and to keep improving their facilities, including the $173 million enlargement of an engine facility in Montgomery.
The outcomes are self-evident. Sales have significantly increased. Strong product reviews can be found. Additionally, Tucson, Sonata, and Santa Fe have just introduced restyled versions. 94,000 American jobs are supported by Hyundai enterprises, both directly and indirectly. Everything comes together to create a success story that helps consumers while boosting the economy of the United States.
Hyundai’s Modification To Its Management Approach
Hyundai officials give Mong-Koo Chung, the son of the company’s founder Chung Ju-Yung, credit for coming up with a viable long-term plan for the business to shed its previous reputation as a low-quality auto manufacturer. They used rigorous statistical analysis and the “Six Sigma” management methodology to find and fix manufacturing faults. “Hyundai’s [initial] philosophy was to increase sales volume-as much as we could,” said Steve Kelleher, CEO of Hyundai Canada. He mentioned in particular how the senior brass was able to “seek out criticism and deal with it” as the reason they turned around their sinking ship.