2.0 Article Summary
At first Hyundai just a car repair shop founded in 1947 by Ju-Yung Chung. After three decades, he expanded Hyundai into other industries, including engineering, construction and auto manufacturing in 1967. In 2000, before he died, Chung split up his holdings among his sons, giving each control of what are now separately owned companies, including Hyundai Heavy Industries Group and Hyundai Asan, a real estate development and tourism company. Mong-Koo (M.K.) Chung became chairman of Hyundai Motor. Hyundai is a family-run company. This one of big reason it has been able to maintain focus and discipline. The company is also one of the key actors in the astonishing economic surge in South Korea since the 1960s.
The push of development in Hyundai started under President Chung-Hee Park, a general who seized power in 1961 until 1979. When Park took over, South Korea was an impoverished agricultural country whose average per-capita income was about the same as Ghana's. Park curtailed imports, and channeled loans from foreign lenders and domestic banks into export-oriented manufacturing concerns. He is the person who transforming South Korea from agricultural country into export-oriented manufacturing. During this era, Hyundai has move a step forward to become one on the player in export-oriented manufacturing along with country’s biggest industrial enterprises such as Samsung and LG.
In 1980s, Hyundai tried to enter North America market especially Canada and USA to become one of the main players at automotive industries by flooding the market with cheap and poorly made compacts. They try to compete with the other automotive giant by providing cheaper car rather than provide quality product. They introduce Pony and Excel model in the North America market. Those two models were hot sellers at the start. Hyundai started exporting the Pony to Canada in 1983. Priced at about $6,500, the Pony sold more than 57,000 units in 1985, making it the No. 1 import model in the country. But the car's exterior and interior finishes were poor, it rusted easily in the Canadian winter and the plastic heater core often froze. In the U.S. when the front-wheel-drive Excel was introduced in 1985. The car was priced at less than $5,000 (U.S.), was voted one of the year's 10 best new products in a Fortune magazine survey, and sold more than 168,000 units in its first year. But sales started skidding in 1988. At first people just assumed the vehicles were Japanese quality because they never heard about Hyundai previously. Both of the models only became jokes for years due to lack of quality and poorly made.
Executives in Seoul were humiliated by their company's bad reputation. Cutting level of quality to compete on price was not just a short-term tactical error but a mistake in long-term strategy. But they learned from their mistakes. In the 1990s, they committed themselves to quality, an intense work ethic, and a centrally directed long-term plan this change as boost the sell and the brand of Hyundai. The company had already started making some improvements in the 1990s. An early milestone was the development of Hyundai's first proprietary engine, the Alpha, in 1991 and the 1999 model year, Hyundai was confident enough of the quality of its cars to introduce a 10-year powertrain warranty in the United States, an industry best-practice at the time. Hyundai didn’t follow its other rival such as Toyota to spend more in research and development in order to make revolution of their company in 1960s and 1970s. However Hyundai only spend 5% of its revenues on R&D which is just average in automotive industries. But, the company studies the best technology and process of its competitors and applied in their company. Hyundai has make quality of their product as their priority. They did not only relay on their quality control report but also looking at third-party assessments of what the customer is saying about their product quality....
Please join StudyMode to read the full document