Hyundai is a South Korean multinational automotive manufacturer that has grown from humble beginnings to become one of the world’s largest car makers. In 2022, Hyundai ranked third in global production volume, behind Toyota and Volkswagen, with 4.86 million units Hyundai also had a 5.13% market share by revenue in the global automotive market in 2022, behind Toyota (12%), Ford (7.3%), and Volkswagen (6.3%) How did Hyundai achieve such remarkable success in the highly competitive and dynamic industry? What are the key factors that contributed to its growth and innovation? What are the challenges and opportunities that Hyundai faces in the future? This article will attempt to answer these questions by tracing the history, strategy, and vision of Hyundai as a global car manufacturer.
The Origins of Hyundai
The origins of Hyundai date back to 1947, when Chung Ju-yung, a South Korean entrepreneur, founded the Hyundai Engineering and Construction Company. The name ‘Hyundai’ means ‘modern times’, deriving from the Korean word ‘Hyun’ (현) which means ‘modern’ or ‘present’ and ‘Dai’ (대) which refers to ‘era’ or ‘generation’Following the liberation of South Korea in 1945, the company was awarded major government construction contracts and became responsible for building much of the country’s transportation infrastructure as the nation rapidly industrialized. It built the Kyeong-bu expressway, among other important structures
In 1967, Hyundai Motor Company was founded as a subsidiary of Hyundai Engineering and Construction Company. The following year, the construction of the company’s Ulsan assembly plant was completed. Today, it is the world’s largest integrated automobile manufacturing facility, with an annual production capacity of 1.6 million units.The company also owns a global vessel fleet operated by Hyundai Glovis and its own steel-making affiliate, Hyundai Steel, which control the whole value chain of car production
In 1968, the Cortina was the very first vehicle successfully assembled by Hyundai at its Ulsan plant, in cooperation with Ford Motor Company. Hyundai set a record for the quickest time between ground-breaking and full-scale operations for any Ford assembly plant around the world – just under six months Following the Cortina’s initial success and eventual dominance of the European market, Hyundai decided to develop its own car. The company hired George Turnbull, the former Managing Director of Austin Morris at British Leyland in February 1974. He immediately hired six European chief engineers to assist him, including a body designer, two chassis designers, two production engineers and a test engineer Together they created the Pony, which was presented at the Turin Motor Show in October 1974, before it was later introduced to the market in December 1975
The Rise of Hyundai
The Pony was a milestone for Hyundai, as it was the first South Korean car to be exported to overseas markets. It was also designed by Giorgio Giugiaro of Italdesign and powered by Mitsubishi engines, which gave it a competitive edge in terms of styling and technology. The Pony was well received by customers in Europe, Canada, and Latin America for its affordability and reliability. In 1984, Hyundai entered the US market with the Excel model, which was based on an updated version of the Pony platform. The Excel sold over 100,000 units in its first year, breaking the record for the most successful debut of a new car brand in US history
Hyundai continued to expand its product portfolio and global presence throughout the 1980s and 1990s. It launched new models such as the Sonata midsize sedan, the Scoupe sports coupe, the Elantra compact sedan, and the Accent subcompact sedan. It also established new manufacturing facilities in Canada, India, China, Turkey, Brazil, Russia, and Czech Republic. It also acquired Kia Motors in 1998, which became another major car brand under Hyundai Motor Group. By 1999, Hyundai had achieved a global market share of 5%, up from 1% in 1986
However, Hyundai also faced some challenges during this period. It suffered from quality issues and customer dissatisfaction due to frequent recalls and poor after-sales service. It also faced fierce competition from Japanese and American rivals who had more advanced technology and stronger brand recognition. It also had to cope with financial difficulties caused by the Asian financial crisis in 1997-1998, which forced it to restructure its debt and sell some of its non-core assets
The Transformation of Hyundai
In order to overcome these challenges and improve its competitiveness, Hyundai embarked on a radical transformation in the early 2000s. It adopted a new vision of becoming a world-class car maker that offers high-quality products and services to customers. It invested heavily in research and development, design, engineering, and quality control. It also established a new corporate culture that emphasized customer satisfaction, innovation, and teamwork. It also launched new initiatives such as the 10-year/100,000-mile warranty program, the Hyundai Assurance program, and the Genesis luxury sub-brand
As a result of these efforts, Hyundai achieved remarkable improvements in its performance and reputation. It won numerous awards and accolades from various organizations and media outlets for its quality, safety, design, and innovation. It also increased its sales and market share in major markets such as the US, Europe, China, and India. It also diversified its product portfolio to include new segments such as SUVs, crossovers, hybrids, electric vehicles, and fuel cell vehicles. It also developed its own proprietary technologies such as the Theta engine, the HTRAC all-wheel drive system, the Blue Link connected car system, and the SmartSense advanced driver assistance system.
By 2022, Hyundai had become one of the world’s largest car manufacturers, with annual production of 4.86 million units and annual revenue of 117.61 trillion won. It also had a global network of over 5,000 dealerships and showrooms in 193 countries. It also had a strong presence in emerging markets such as Southeast Asia, Africa, and the Middle East. It also had a leading position in vehicle electrification, with annual sales of 670,000 battery and fuel cell electric vehicles, making it one of the top three EV manufacturers in the world.
The Future of Hyundai
Hyundai is not resting on its laurels, but rather looking ahead to the future with a bold vision and strategy. In 2019, Hyundai announced its Strategy 2025 roadmap, which aims to transform the company into a Smart Mobility Solution Provider that offers personalized services and contents on an integrated platform. Under this strategy, Hyundai will foster two core business pillars: Smart Mobility Device and Smart Mobility Service. The Smart Mobility Device pillar will supply products that are optimized for the services and include not only automobiles but also personal air vehicles (PAVs), robotics, and last-mile mobility. The Smart Mobility Service pillar will provide customized services and contents on the devices to help secure a broader customer base.
To realize this strategy, Hyundai has identified three key directions: enhancing profitability in internal combustion engine (ICE) vehicles, securing leadership in vehicle electrification, and laying the groundwork for platform-based businesses. Hyundai plans to invest 61.1 trillion won into R&D and future technologies by 2025, targeting an operating margin of 8% in automotive business and a 5% market share by 2025. Hyundai also plans to offer most new models with EV drivetrains by 2030 in major markets and by 2035 in emerging markets. Hyundai also plans to play a pivotal role in global society’s transition to clean energy by helping make hydrogen an economically viable energy source.
Hyundai is also pursuing various partnerships and collaborations with leading players in different fields to create synergies and innovations for its future mobility solutions. For example, Hyundai has partnered with Uber to develop PAVs for urban air mobility; with Boston Dynamics to explore robotics technologies; with Aptiv to form Motional, a joint venture for autonomous driving; with Canoo to co-develop electric vehicle platforms; with SK Innovation to create battery ecosystems; with Saudi Aramco to cooperate on hydrogen energy; with Grab to provide mobility services in Southeast Asia; and with Spotify to offer music streaming services in cars.
Summary
Hyundai is a South Korean multinational automotive manufacturer that has grown from humble beginnings to become one of the world’s largest car makers. Hyundai has achieved this success by overcoming various challenges and pursuing continuous improvement and innovation in its products and services. Hyundai has also adopted a new vision and strategy to become a Smart Mobility Solution Provider that offers personalized services and contents on an integrated platform. Hyundai is committed to providing freedom of movement to everyone by investing in mobility services, vehicle electrification, hydrogen energy, and future technologies.