The Road to the Self-Reliance New Product Development of Hyundai Motor Company

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THE ROAD TO THE SELF-RELIANCE NEW PRODUCT DEVELOPMENT OF HYUNDAI MOTOR COMPANY

June 1995 Young-suk Hyun Ph.D Professor, Business Administration Han Nam University Taejon KOREA

133 Ojung-dong Taejon 300-791, KOREA Tel : 82-42-629-7588 Fax : 82-42-672-7183

1

THE ROAD TO THE SELF-RELIANCE NEW PRODUCT DEVELOPMENT OF HYUNDAI MOTOR COMPANY

1.

Introduction

2.

Hyundai's Philosophy in New Product Development (NPD): The Road to the Technological Self-reliance

3

Key Role Persons in NPD

4.

NPD Strategy

5.

NPD Operations

and Outputs

6.

Brief Project History

Case Case Case Case

I II III IV

: : : :

Sonata New Grandeur Accent Alpha Engine

(1988) (1992) (1994) (1991)

7.

Conclusion

References

2

THE ROAD TO THE SELF-RELIANCE NEW PRODUCT DEVELOPMENT OF HYUNDAI MOTOR COMPANY

ABSTRACT

============================================================================== This paper traces the new product development of Hyundai Motor Company, Korea, which, since its foundation in 1967, has maintained the self reliance strategy, particularly in new product development. Business strategy of Hyundai contrasts sharply with other auto makers in developing countries as well as to other Korean makers. In spite of a late entrance to the auto business, this unique strategy has led Hyundai to becoming a market leader in Korea and to becoming the thirteenth producer in the world-recording an output of over one million in 1994. Hyundai Motor has a aggressive plan with a goal to be within the 10 top auto makers by 2000 (Global Top-10 plan) but the process of accumulating the technological resources the company needs is not yet well established. The intent of this paper is to provide readers with a basic understanding of Hyundai's approach in new product development under internationally oligopolistic markets and how it has accumulated technological resource capability in relation with foreign alliances. The research method consists of literature reviews of published sources on firm's activities--including company history and interviews with development and management personnel. The work will first overview the history and development of Hyundai, then will produce case studies on Sonata (1988), New Grandeur (1992), Accent (1994) and the Alpha engine (1991). ==============================================================================

3

THE ROAD TO THE SELF-RELIANCE NEW PRODUCT DEVELOPMENT OF HYUNDAI MOTOR COMPANY

I. INTRODUCTION

The

first

international

motor

show

was

held

by

Korean

Automobile This

Manufacturers Association (KAMA) from 4-10 May 1995 in Seoul, Korea.

symbolic event exhibited new models, concept cars, and electric cars developed during the 30 year history of the Korean Auto Industry. The Korean economy has progressed very rapidly in the last three decades moving from an agricultural base to an industrial base achieving the status of having the twelfth largest GNP by 1994. The Korean economy has been led by a

large group of business leaders (called "chaebol" in Korea) consisting of companies like Hyundai, Samsung, Daewoo, Lucky Goldstar (L-G) and Ssangyong-most of which have gone on to extensively diversify their companies. For

example, Hyundai and Samsung are currently operating ventures in electronics, semi-conductor, construction, trading, machinery, automobile, shipbuilding, finance and insurance, newspapers--to name a few--over fifty independent

firms. The auto industry also has progressed very rapidly during the last two or three decades and Korea has become the sixth largest auto-making country reaching a production level of 2.3 million vehicles in 1994. Among the many

developing countries only Korea has exported an indigenous model of automobile since World War II. Hyundai was founded in December, 1967 making in a late entrant as compared to Daewoo Motors, commercial vehicle maker, Kia, and Asia Motor...
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