Professional Documents
Culture Documents
INTRODUCTION
The purpose of this project is to know consumer preference about i-10 & wagon-r.
Today there is a cut throat competition in the market and an Automobile industry
cannot escape itself from this competition. So its became very important for every
company of this industry to provide better services to aviary the comparative
advantage So this project is very important for Morani Hyundai Ltd to increase the
satisfaction level of its customers . So that it can retain its customer for a long time
and can maintain good retains with its customer to increase its profitability with
customer satisfaction
1
CHAPTER-2
AUTOMOBILE SECTORE
Automobile Features
Production volumes in automobile companies have grown by around 2% per year over the last
20 years; However, its relative importance in terms of market value compared to other industry
sectors has decreased significantly. Today the automobile industry represents less than 2% of the
total European market capitalization, while 20 years ago the sector was almost double in relative
size.
Only about 1/4 of over 50 car manufacturers who were operating 40 years ago have been able to
retain their Economic independence. Despite this consolidation, overcapacity in the industry is a
constant issue, keeping pricing and the return on invested capital under pressure when the cost of
capital can often not be covered. A high fixed cost base ensures that companies follow a growth
strategy. However, this does not mean more jobs in the sector, but rather that fewer employees in
lower-cost countries have to produce more.
As a result of tough competition, product cycles have become shorter which creates a crowded
market place with newer and fresher products. This also means that 1) the competitive advantage
period of a model, or technology, decreases, and 2) research & development costs have to be
covered more quickly.
Recognizing market movements first, or even creating them, is a key success factor for
automobile companies. For example, early detection of the rising demand for hybrids was an
important marketing move for Toyota, while other companies may be launching their hybrids
when competition is already quite intense.
The industry is mature, especially in the European and American markets, while some Asian
markets (e.g. China and India) still offer some growth. Overall, demand growth is likely to stay
below the nominal GDP (Gross Domestic Product) expansion rate.
In all consumer markets, whether they are low-priced household goods, food, apparel, or cars, a
clear polarization exists. On one side there are people who can afford to buy very expensive
automobiles, while on the other, demand for low-cost vehicles is increasing. This trend can be
expected to continue and car manufacturers have to ensure that they are not going to be lost in
the middle.
The regulatory focus on greenhouse gas emissions, as well as the increasingly tight regulations
on air pollutants, is creating pressure for automakers to reduce fuel consumption, as well as
emissions from internal combustion engines.
The trend is moving towards developing drivetrains based on new technologies such as hybrids
and fuel cells.
Branding, technological leadership (especially in fuel efficient propulsion technologies and
safety) and consequently differentiation, as well as good supplier relations will be the key
success factors for the automobile company of the future.
Deutsche Bank, Global Automotive Industry, The Drivers: How to navigate the auto industry, 27
August 2004.
2
This Euro if sector report has been compiled with research by SAM. It describes the major
social and environmental challenges facing the European automobile industry and the
associated risks and opportunities these pose for long-term returns. Notwithstanding the
significant potential environmental risks and opportunities highlighted in this document, the car
industry has achieved significant improvements in terms of transparency over past years.
Although the auto parts makers are integrated parts of the value chain, specific issues uniquely
relevant to Them are not addressed here.
3
builds safety into the transport system, and improving implementation mechanisms and tools to
achieve this.
Automobile companies are very large employers. Some major companies in Europe have over
300,000 employees worldwide.
A strong workforce provides the basis for a successful company. In order to foster their
commitment, automobile companies must continually invest in training and development of their
employees.
Labor costs represent on average only about 10% of the sales price of a car while material costs
are responsible for around 50%. R&D expenses will rise with increasing technical complexity of
the product as well as with tougher safety and environmental regulations. Additionally,
marketing costs are likely to go up as the need for differentiation will persist. Pressure to make
cost elements, like labour, more flexible and to continuously restructure or even outsource part of
operations is likely to increase.
As car manufacturers are becoming assemblers, instead of manufacturers, the integration of
suppliers into vehicle development and production is increasingly essential and a decisive factor
in competition.
A potential issue for car manufacturers is their rising dependence on their suppliers for
innovation and quality. It is therefore necessary for the car company to integrate these criteria
into the selection process.
In the context of climate protection the western industrial nations would have to lower their
GHG emissions by 60% to 80% by 2050 in order to limit global temperature increases to no
more than 2°C of pre-industrial levels.4 This means that GHG emissions would have to be
reduced by 2%-3.5% per year. On the assumption that car traffic increases by 2% per year,
efficiency would have to increase by around 4%-5%, which is significantly higher than the
commitment from the European automotive industry of 140 g CO2/km by 2008.
The tougher ACEA objectives will be substantially more difficult and costly to meet since it
might require the hybridization of the drive train and more dramatic shifts in the product
portfolio. To meet the target by 2008, carmakers need an annual rate of improvement of 3.3%,
suggesting that they may have to accelerate the introduction of expensive new technologies to
boost fuel efficiency. Carmakers recognize that this will be challenging.
To meet current imposed carbon constraints, Original Equipment Manufacturers (OEMs) can
turn to a wide range of carbon efficient measures, such as incremental technologies, alternative
fuels, hybrid vehicles, and, in the more distant future, fuel cell technology. With rising oil prices,
bio and synthetic fuels, which produce less GHGs than petroleum fuels, are becoming a viable
alternative to gasoline and diesel. Leaders in these areas will gain competitive advantage and
brand differentiation in the industry in the coming years.
Hybrid drive trains are likely to provide an interim solution, although they do not significantly
reduce emissions when driving long distances. Hydrogen-related technologies may represent a
revolutionary but long-term answer as they are currently still too expensive and the infrastructure
is not available yet.
Due to the characteristics of combustion engines (for petrol and diesel), it is not possible to
reduce all emissions through improved engine efficiency alone. While diesel engines have
advantages in terms of CO2 emissions compared to its petrol counterparts, they produce much
higher emissions of PMs, HC and NOx. Thus, this can result in a trade-off between public health
impacts and climate change.
4
Transforming a diesel engine into a cleaner power train requires sophisticated technology. The
average cost of compliance for Euro 5 is estimated by the VDA (Verb and Detacher
Automobilhersteller) at €800 per vehicle. Volkswagen puts the additional costs required at
roughly €1 000 per vehicle. This is comparable to the higher material costs experienced in 2005
in terms of magnitude.
Some auto sector analysts, however, consider these costs to have been overestimated by the
automobile lobby, and quote much more manageable figures closer to €140 per vehicle.
Companies that have market-ready, new technologies enabling compliance with tougher
standards should be able to improve their short-term competitiveness.
In the developed and developing worlds, strategies should aim at achieving significant reductions
of road traffic injuries from current levels and curbing the growth rate in deaths and injuries.
Either through regulation or by market forces, car manufacturers are already facing pressure to
make cars less dangerous, not only for the drivers and occupants of the vehicle but also for those
on the street (e.g. pedestrians, bicyclists).
The following measures can be taken by car manufacturers to meet the EU regulations creating
more space between the front grill and the so-called hard points (such as the engine) to absorb
the energy from a collision ; 2) redesigning the car’s hood to make it a better energy absorber
and fitting the car with active safety systems such as airbags ; and 3) equipping the car with
active safety systems such as night vision, adaptive lighting, active braking systems and run-flat
tires to prevent accidents.
The automobile industry has one of the highest numbers of temporary workers as a percentage of
the total workforce of any sector (often 10% of the workforce in a given year but representing up
to 30% during peak production periods).8 Temporary work might in some cases be less stable
and as such, this category of employee cannot afford to alienate automobile manufacturers and
their subcontractors, which are often the sole local employers. The abusive use of temporary
employment is now taken more into account by industrial tribunals, which do not hesitate to rule
against companies that overstep the mark and impose fines.
The high number of temporary workers at automaker companies may also affect the quality and
production of cars due to increased turnover of employees and lack of skills transfer.
To attract well qualified employees and maintain a high level of motivation, automobile
manufacturers should offer a positive and safe working environment including: efficient work
structures with flexible working hours, measures to promote young employees, part-time
employment and child care.
The evaluation of the suppliers should not only be based on technical skills, quality of work and
pricing, but also on environmental and social standards.
Suppliers have to be managed in the same way as subsidiaries in order to make work sequences
and the interface between the supplier and the assembler as efficient as possible. In this respect,
it is essential for the car company to set incentives for suppliers to guarantee not only a high
level of quality but also access to innovation and state of the art technology. The car
manufacturer has to make sure that the suppliers manage their people and talents in an
appropriate way.
Fuel Efficiency & Climate Change Air Quality and Public Health Safety Human Resources Management
Supplier
Relations.
5
India is the world's fastest growing free market and the world, and India in particular, has
changed since the last Auto Expo, said Union Minister for Commerce and Industry, Kamala
Nath. He was speaking at the inauguration
of the 8th Auto Expo, which was held at the Lal Chowk theatre.The minister said words like
globalisation, which were just buzzwords a few years ago,have now become a reality. Nath also
said that unlike other parts of the world where the human resources reservoir was falling, in India
it is on the rise, and augured well for the industry in particular.
India's population demographics gives it a unique advantage in the world given that an estimated
300 million people in the age group 18-35 and an estimated 60 percent of the population is below
the age of 25 years.
India's domestic industry is slated to undergo a huge shift as the regional trade agreements and
bilateral agreements, which are being signed, mean businesses have to gear up to a whole lot of
new challenges.
President, CII, YC Deveshwar said Indian manufacturing has rebounded, if the 10 percent
growth in the last six quarters is anything to go by.
Thanks to the unshackling of Indian entrepreneurship,the country has seen an
average growth rate of six percent in the last decade.
He spoke about the importance that is being given to quality with a majority of Deming Prize
winners coming from the auto sector.
He acknowledged the contributions of the small and medium enterprises in this effort.
Highlighting some of the key challenges for the auto sector,
Deveshwar said it was necessary to put in place a new model for Research & Development
(R&D) and to take up the challenge in a bigger way, especially the aspect of clean air
management.
In his address, president, ACMA, AK Taneja said the potential of the automotive sector could be
gauged from the fact that domestic passenger car market is likely to cross the three million mark
by 2015, and the commercial
vehicle sector will cross the half a million mark. This means that the auto component sector
could well see sustained growth over a 10 year period.
The inaugural meet was also attended by Madhur Bajaj, president SIAM, Mr NK Khanna of
ITPO, Dr Berndt Gottschlak of theInternational Automotive
Manufacturers Organization (OICA) and R Seshasayee, Vicepresident,CII and Managing
Director, Ashok Leyland. _
CMYK
Audi AG has taken a step forward and launched the A4 sedan in the country today. A Mercedes
C-class and BMW 3-series rival, the new A4 sets benchmarks in terms of technology and
pricing. Speaking at a press conference earlier today, Audi Country Manager for India, Michael
Weber said that the A4 offers a refreshing alternative for drivers who will not compromise on
performance and quality and want something different
from every other luxury car in the neighbor hood driveways.
Audi is to offer the A4 in three engine variants. A 1.8-litre turbocharged
petrol producing 163PS and a 2.0-litre turbo diesel punching out 140PS will form the mainstayof
the model range. A third engine will be available in the S4 performance sedan, belting out a
whopping 344 horsepower from a4.2-litre V8 engine. The former twowill be available with six-
speed multitronic
6
transmissions for the moment while no word was said about the latter.
Besides powerful engines, Audi will also offer a vast range of technological
gizmos to suit the upmarket buyer. Features such as ESP or Electronic Stability Program,
permanent four wheel drive
Around 35 to 40 percent of them have graduated from SSI to medium scale industry. Most of the
component manufacturers have been in the medium
sector for which there is no official definition so far and may involve
More than Rs.10 million investments in plant and machinery.
Five to seven percent of the companies are from the upper SME
segment in Auto Enterprise 2006.Most of the companies in the event
directly or indirectly derive over.
250 exhibitors at Auto Enterprise
Audi AG has taken a step forward nd launched the A4sedan in the country today.
7
Mercedes C-class and BMW 3-series rival, the new A4 sets benchmarks
In terms of technology and pricing. Speaking at a press conference earlier
Today, Audi Country Manager for India, Michael Weber said that
The A4 offers a refreshing alternative for drivers who will not compromise
On performance and quality and want something different from every other luxury car in the
neighborhood driveways.
Audi is to offer the A4 in three engine variants. A 1.8-litre turbocharged
Petrol producing 163PS and a 2.0-litre turbo diesel punching out 140PS will form the mainstay
of the model range. A third engine will be available in the S4 performance sedan, belting out a
whopping 344 horsepower from a
4.2-litre V8 engine. The former two will be available with six-speed multitronic transmissions
for the moment while no word was said
about the latter.
Besides powerful engines, Audi will also offer a vast range of technological
gizmos to suit the up market buyer. Features such as ESP or Electronic Stability Program,
permanent four wheel drive Audi drives in A4 range into
Indian market Michael Weber, country manager, Audi at the A4 launch.
continued on page 11 _Commerce & Industry Minister Kamal Nath with CII President YC
Deveshwar. Athe seventh edition of Auto
Enterprise was inaugurated during the 8th Auto Expo today by Jagdish Khattar, Managing
Director, Maruti Udyog Limited. An exclusive show for the auto ancillary and component
manufacturers, Auto Enterprise
2006 is spread over 5500 sq mts. More than 250 exhibitors representing
a wide range of auto products, including automobile components
and accessories, Safety & Garage Equipment, Testing & Pollution Control Equipment spiced up
the event. The main product
lines come from Mechanical Spare parts - forged, blanked and cast, plastic injection moulding
items and auto electrical products.
The show provides a unique opportunity to the small Indian
enterprises to showcase their quality and technological capabilities
and find suitable partners for a guaranteed future.
8
Compared to the last edition, several small enterprises have now graduated to the medium sector
with some even achieving the status of 100 percent EOUs. Around 35 to 40 percent of them have
graduated from SSI to medium scale industry.
Most of the component manufacturers have been in the medium
sector for which there is no official definition so far and may involve
more than Rs.10 million investments in plant and machinery.
Five to seven percent of the companies are from the upper SME
segment in Auto Enterprise 2006.
Hyundai Group
Address:
140-142, kye-dong, Chongno-gu
Seoul 110-793
South Korea
Statistics:
Public Company
Incorporated: 1947 as Hyundai Engineering & Construction Company
Employees: 359
Sales: $75 billion (Hyundai Group 2000); $20.4 billion (Hyundai Corp. 2001)
Stock Exchanges: Korea
Ticker Symbol: 11760
NAIC: 423390 Other Construction Material Merchant Wholesalers; 423510 Metals Service Centers and
Other Metal Merchant Wholesalers; 423620 Electrical and Electronic Appliance, Television, and Radio
Set Merchant Wholesalers; 423810 Construction and Mining (Except Petroleum) Machinery and
Equipment Merchant Wholesalers; 423820 Farm and Garden Machinery and Equipment Merchant
Wholesalers; 423830 Industrial Machinery and Equipment Merchant Wholesalers
Company Perspectives:
Hyundai Corp. is preparing to leap over the world's top-ranking companies through the utilization of
business network experience and know-how to create a new business model for the 21st digital era.
Key Dates:
1947: Chung Ju Yung forms Hyundai Engineering & Construction Company.
1958: The company sets up the Keumkang Company to make construction materials.
1965: Hyundai Engineering & Construction begins its first overseas venture--a highway project in
Thailand.
1967: The Hyundai Motor Company is formed.2001: The Hyundai Group conglomerate continues to be
dismantled.
CHAPTER-3
9
Company History:
Vision, mission & value:-
Hyundai has experienced tremendous growth, establishing a global management and quality
improvement system, based on our mid–and long–term vision of "innovation for
customers." Hyundai has been selected as one of the top 100 global brands three years in a
row and has now truly become a global automobile maker, receiving positive reviews from
many independent evaluation agencies and the mass media. Hyundai has also increased
productivity, completing the construction of its second plants in China and India. We have
also shifted our global management into higher gear by successfully generating sales of a
strategic car targeted at the European market.
In 2008, Hyundai will build the foundation to become the best automobile company in the
world by strengthening our management internally and by reinforcing our global competitive
edge externally. In order to carry this out, we will focus on three areas.
First, Hyundai will build a solid foundation for customer–oriented management. By engaging
in management activities that put customers first in all areas, including R&D, production,
marketing, sales, and maintenance, based on the highest quality products and continuous
quality management, Hyundai will increase its public brand–image awareness and profits.
Second, Hyundai will strengthen the effectiveness of our marketing efforts in order to
become a leader in the global marketplace. Through brand value improvement and targeted
marketing efforts, Hyundai will deliver the world´s highest quality automobiles to its
customers.
Third, Hyundai will continue to fulfill its social responsibilities as a leading global company,
contributing to the development of a more prosperous world community. Furthermore,
Hyundai will prepare for a sustainable future by developing and distributing new
environmentally–friendly vehicles on a continuous basis.
Once again, I would like to thank you for your support. Hyundai Motor Company is ready to
be reborn as a top automobile manufacturer by continuing to establish a globally–focused
approach to management. We promise you that Hyundai will always take bold and confident
steps for our customers worldwide.
The Hyundai Group spent most of its history operating as one of South Korea's largest chaebols, or
conglomerates. The group displayed spectacular growth since its founding in 1947 and its rapid
expansion--to a point where its interests included car manufacturing, construction, shipbuilding,
10
electronics, and financial services--reflected the achievements attained during South Korea's economic
miracle. The South Korean economy took a turn for the worse during the late 1990s, however, which
prompted President Kim Dae Jung to launch a series of reforms aimed at dismantled large, often
corrupt, chaebols. By 2001, much of the Hyundai Group had been dismantled. Roh Moo Hyun, elected
President in 2002, continues to reform the South Korean business sector.
Hyundai's growth was linked inextricably to South Korea's reconstruction programs following World War
II and the Korean War as well as to the state-led capitalism that resulted in a polarization of the
country's corporate structure and the domination of the economy by a number of conglomerates. World
War II left the country devastated, and the small recovery Korea had been able to make following this
conflict was reversed during the Korean War, which lasted from 1950 to 1953. The chaebols, which are
similar to Japan's zaibatsu, worked with the government in rebuilding the economy and formed an
integral part of Korea's economic strategy and its drive to build up its industrial base.
One man, Chung Ju Yung, stood at the center of Hyundai's progress from 1950 until he died in 2001.
Chung, considered a founding father of the Korean chaebol structure, left school at an early age and
developed what has been described as an autocratic and unconventional management style. He noted
those areas of industry that the government had selected as crucial to economic development and
structured the group accordingly.
The foundation of Hyundai was laid before the Korean War, in 1947, when Chung set up Hyundai
Engineering & Construction Company. The company was involved in the early stages of the country's
recovery following World War II. After the Korean conflict, development intensified, and Hyundai was
quick to take on a key role, working on civil and industrial projects as well as housing programs. In
1958, it set up Keumkang Company to make construction materials; four years later, when the first of
Korea's five-year development plans was launched, Hyundai was well placed to win a range of
infrastructure contracts. This plan and its successors aimed to lay the foundations for an independent
economy by targeting sectors of industry for expansion.
Against this background, Hyundai expanded its construction and engineering operations as the
economy's momentum increased. In 1964, it completed the Danyang Cement plant, which in 1990
produced well over one million tons of cement. In 1965, the company undertook its first overseas
venture with a highway-construction project in Thailand. Hyundai expanded rapidly overseas,
developing a market with particular success in the Middle East. Its projects in this region included the
$931 million Jubail industrial harbor project in Saudi Arabia.
In 1967, the group took one of its most significant steps, setting up the Hyundai Motor Company and
thus sowing the seed for what was to become the country's leading domestic car manufacturer. Initially
the company assembled Ford Cortina cars and Ford trucks. Two years later, Hyundai took another step
abroad with the establishment of Hyundai America, incorporated in Los Angeles, to work on housing
complexes and other civil projects. In 1970, it further enhanced its position in the construction sector
by setting up Hyundai Cement Company to deal with increased demand at home and overseas.
Toward the end of the 1960s, the government had begun to promote the heavy and chemical
industries. Oil and steel were both targeted. The planners then turned their attention to the
consumption of indigenous steel and focused on shipbuilding, which was then relatively backward
(producing only coastal and fishing vessels), and on the automotive industry. The ambitious plans for
these industries were to be of great significance both to Hyundai and the nation as a whole, and the
1970s proved to be a period of rapid development.
11
Hyundai's entry into shipbuilding would eventually take Korea's shipbuilding industry to second position
in the world, behind Japan. In 1971, Chung decided to begin shipbuilding, and by the following year the
company's shipyard had held its ground-breaking ceremony in Mipo Bay, Ulsan, on the southeastern tip
of the Korean peninsula. In the following year the yard was incorporated as Hyundai Shipbuilding and
Heavy Industries Company.
The Ulsan yard was still at the planning stage when Hyundai won its first contract, for two oil tankers,
from Livanos, a Greek shipowner. The order paved the way to a loan from Barclays Bank of the United
Kingdom. Chung had to borrow capital from foreign banks to build the yard, which was opened in 1974.
In the following year, the Hyundai Mipo Dockyard Company was set up to do conversions and repairs.
This sector developed rapidly throughout the 1970s, but the group was hit by the first oil crisis and the
consequent decline in demand for large tankers. Hyundai, however, quickly won four orders for large
tankers from the Japanese, its main competitors, and concluded technical cooperation deals with
Kawasaki Heavy Industries of Japan and Scott Lithgow of the United Kingdom. Before the market
collapsed, 12 large tankers were built at the yards.
This collapse forced Hyundai to turn to the building of medium-sized vessels. It also took steps to
remain abreast of technological developments in the industry and to develop spin-offs. In 1975,
Hyundai Shipbuilding and Heavy Industries created an industrial-plant and steel-fabrication division,
and in the following year began to produce marine engines carrying famous names such as Sulzer and
B&W.
A further collaboration was clinched in 1977 with Siemens, of West Germany, which led to the creation
of the electrical-engineering division. In the following year the company changed its name to Hyundai
Heavy Industries Company (HHI) to reflect its diverse operations. At the same time it incorporated its
engine and electrical engineering divisions into Hyundai Engine and Machinery Company and Hyundai
Electrical Engineering Company, respectively.
One of the most significant moves in Hyundai's relatively short history was made in 1975, when the
group began constructing an integrated car factory adjacent to its heavy-industry complex at Ulsan. It
was to be the foundation of Korea's largest auto company, one that was to dominate Korea's home and
export markets. By the late 1980s, UBS Phillips and Drew Global Research Group ranked Hyundai 13th
in the world auto industry, with the production of 819,000 vehicles and 1.9 percent of the world retail
market.
The aim of this ambitious project was to move away from car assembly only and to produce, with
government backing, a Korean car, a four-seat sedan called the Hyundai Pony. To this end, it called on
overseas expertise and finance, a policy used not only by Hyundai but by other Korean industrial groups
as well. George Turnbull, a former managing director of British Leyland, who was then vice-president
of Hyundai Motors, was in charge of the project. The car was styled by the well-known Italian designer
Giorgetto Giugiaro, was powered by a Mitsubishi Motor engine, and used U.K. components. The project
was financed largely by U.K. and Japanese sources.
The vehicle was launched in 1975. By the following year, Hyundai was producing 30,000 cars, and by
1979 the total had risen to 110,000. Although Hyundai could sell every vehicle it produced in the
protected home market, it soon sought to attack export markets by reserving approximately one-fifth
of its production for overseas sale. The company first tested the European market, and its potential for
sophisticated markets, by setting up a network of dealers in the Benelux countries, where there were
no dominant local manufacturers.
12
Other areas of the group saw intense activity throughout the 1970s. In 1975, Dongsu Industrial
Company, a construction-material manufacturer, was created, followed in the same year by Seohan
Development Company, a welding and electrode carbide maker. Since it was so heavily reliant upon
exports and several essential imports, the group in 1976 set up Hyundai Corporation, its trading arm.
The corporation integrated the group's sales and marketing strategies, imported natural resources
through overseas investment and joint ventures, and provided assistance to overseas operations. The
corporation eventually led the numerous member companies of the group in sales. At the same time, it
created Hyundai Merchant Marine Company, which concentrated on cargo services, chartering,
brokerage, and related services. The trading arm proved to be an important source of revenue and
quickly grew into one of the country's top exporters.
In the same year, on the construction side, Hyundai formed Koryeo Industrial Development Company
and Hyundai Housing and Industrial Development Company, whose operations included construction
design and property development. Hyundai Precision and Industry Company was created in 1977. Its
activities included auto parts, container manufacture, and locomotive parts.
A year later the group turned its attention to the timber industry with the formation of Hyundai Wood
Industries Company, which made wood products and furniture. In 1978, the group expanded its heavy
and chemical industries to include iron and steel manufacturing when it absorbed Incheon Iron & Steel
Company and Aluminum of Korea.
The 1980s brought problems for HHI. Two of its key businesses, shipbuilding and overseas construction
(the development of which had been actively encouraged by the government in the 1970s),
encountered worldwide decline during the decade. Korean shipbuilders saw new export orders in 1985
slump to only $522 million, compared with $2.3 billion the year before, while profits plummeted.
Overseas construction orders also fell away quickly after reaching a peak of more than $13 billion in
1981 and 1982.
In both cases, Korean industry had to discard its policy of growth at any price. There were job cuts and
a move toward more sophisticated projects such as industrial plant construction and improved
technology. In addition, the company had to contend with damaging labor strikes, which hit its
shipyards and other parts of the group, notably the car factories. HHI instituted major productivity
improvements at the beginning of the decade and stepped up its diversification with the creation of
the Offshore & Steel Structure Division in 1980. Through this division it launched a major drive into the
offshore market, into which it had broken in the late 1970s with orders for the Jubail project in Saudi
Arabia. The division initially operated one yard, but, as demand increased, a second was added in
1983.
In 1982, HHI took over three dry docks from Hyundai Mipo Dockyard Company, which brought the total
it operated to seven. Hyundai Mipo, which looked after the company's ship repair and conversion
business, was reorganized and moved to a new repair yard two kilometers away from HHI. A year later
HHI undertook further reorganization by turning its maritime-engineering division into the special and
naval shipbuilding division, which now concentrates on building naval craft such as destroyers, frigates,
and patrol boats.
The increased emphasis on new technology and innovation was reflected in the setting up of Hyundai
Welding Research Institute in 1983--whose work has since been extended to take in factory
automation--and the creation of a research-and-development center, the Hyundai Maritime Research
Institute, a year later. Work continued on developing products such as the new generation of very large
crude carriers, the world's first semi-submersible drilling rig, delivered in 1987, and a mixed container-
passenger vessel for a Norwegian operator in 1988. The company also broke into the gas-carrier market
in 1986.
13
The latter part of the decade was clouded by strikes that were to tarnish the Korean shipbuilding
industry's image. In addition, the company had to contend with higher wage costs that blunted the
competitive edge it had over its Japanese rivals. HHI also became embroiled in a legal wrangle with Sir
Yue-Kong Pao's World-Wide Shipping Group in 1988. The dispute was over an order for very large crude
carriers, which it had agreed to build in 1986 when the market was in a trough.
The strikes that affected the Ulsan yard in the latter part of the 1980s hit production and sales, and in
1988 HHI was to record its first-ever loss, that of W29 billion on sales that declined slightly to W945
billion; this came after breaking even the previous year. In 1990, the yard was hit by further strikes,
although it managed to land a $600 million order for ten combination vessels from a Norwegian
shipping group.
The 1980s were to prove equally eventful for Hyundai Motor Company. After the oil shock of 1979, the
government took steps to protect the industry, which had by then made large investments in plants and
equipment. It kept a tight grip on the development of this sector and in 1981 divided the market,
restricting Hyundai to car and large commercial vehicle manufacture. These regulations were revised in
1986 following the recovery of the market, and Hyundai was able to resume manufacture of light
commercial vehicles.
By the middle of the decade, Hyundai had taken Canada by storm. Its Pony subcompact vehicle became
Canada's top-selling car less than two years after entering the market. Hyundai's sales in Canada,
where it was also selling the Stellar, shot from none in December of 1983 to 57,500 units in the first
nine months of 1985, topping those of Honda and Nissan combined. Total production in 1985 had risen
to 450,000.
In 1985, the company announced plans to build a car assembly plant at Bromont, near Montreal, and at
the same time decided to enter the U.S. market. The entry into the U.S. market, begun in 1986,
proved an immediate success. Its low-priced Excel model was well received, and of the 302,000 cars
exported in that year, 168,000 were sold in the United States, where sales were to increase to 263,000
the following year. Hyundai's initial success in the United States, though, faded before the end of the
decade when sales began to flag. Problems in the company's key overseas market were attributed to
the lack of new models, increasing competition in the weakened U.S. car market, and the severe
strikes that hit the company in the latter part of the 1980s and in 1990.
Hyundai decided to move up market with the introduction of the Sonata, a four-door sedan, in late
1988; initial sales, though, proved disappointing. A year later, this car was being manufactured at the
Bromont plant, following the opening of the factory in 1989. In the same year, Hyundai signed a deal
with Chrysler Corp. to build 30,000 midsize, four-door cars for the U.S. company, starting in 1991.
Chrysler was linked to Mitsubishi Corporation, which in turn was affiliated with Hyundai, in which it
held a 15 percent stake.
Hyundai planned to increase production at the Canadian plant to 100,000 by the time the Chrysler deal
came into effect. Export sales, which were also hit by the appreciation of the won and the
depreciation of the yen, remained sluggish. Increased wage costs also affected the group but had the
advantage of boosting domestic sales that, for the industry as a whole, increased 50 percent to 356,000
units in 1989.
The group became intent on reducing its dependence on the U.S. markets. By 1990, the domestic
market was proving increasingly important to the essentially export-oriented group. Both the car and
construction markets were enjoying strong demand at the end of the decade. This situation helped
14
Hyundai Engineering & Construction, like the vehicle operations, to take up the slack created by
declining markets abroad, particularly in the Middle East. The group had accumulated experience in a
broad range of plant construction, including Korea's first nuclear power plant. Meanwhile exports in the
shipbuilding sector were showing a marked improvement.
Following the creation in 1983 of Hyundai Electronics, Hyundai stepped up its presence in the
electronics field and produced semiconductors, telecommunication equipment, and industrial
electronic systems. The company, which focused on industrial markets, sought to increase its presence
in consumer electronics, despite formidable competition from domestic companies such as Samsung
and Goldstar.
The group as a whole had proved itself capable of taking diverse markets by storm and was determined
to maintain and expand its markets by stepping up research-and-development spending. However, the
country's drive towards democracy brought new uncertainties. In the changing economic and political
environment, the group faced a labor force seeking higher wages, a less competitive currency, and
increasing competition in the all-important overseas markets.
Faced with this changing political scene and a less favorable international rate of exchange, Hyundai
shifted gears in the early 1990s. In automaking, its largest enterprise, it worked to regain lost ground in
the United States, where demand for its low-priced Excel and somewhat higher-priced Sonata models
slumped in the wake of widespread consumer complaints and a depressed entry-level market. Hyundai's
new Elantra sedan, selling for $9,000, was to be its lead item in the U.S. market. The group's chairman
at that time, Chung Ju Yung's younger brother, Chung Se-yung, was expecting a new day for the group,
as Korea itself matured with new labor and political freedoms.
As Korea's second-largest conglomerate, with 1990 revenues estimated at $35 billion, Hyundai Group
was clearly to play an important role in the new Korea. Indeed, the Hyundai founder and chairman,
Chung Ju Yung, chose personally to play a new, political role in that development, founding a new
political party early in 1992 with a view to promoting open-market policies. Chung's Unification
National Party (UNP) promptly won 10 percent of National Assembly seats; Chung himself then retired
from his Hyundai chairmanship to set his sights on the Korean presidency. The Hyundai conglomerate,
already forced by the government to pay billions in back taxes, came under even more severe
government pressures after Chung formed his party. Regulators charged illegal political contributions
by one Hyundai company and accused others of tax evasion. In addition, Hyundai's ability to finance its
operations was threatened by other government actions. In return, Hyundai, at this time headed by
Chung Se Yung, threatened to withhold huge investments planned for the coming year. In 1993, having
finished third in South Korea's presidential election, Chung Ju Yung reportedly said that he would
resume chairmanship of the Hyundai Group and would reorganize the corporation into many
specialized, independently run companies. In 1995, his second-eldest son, Chung Mong Koo, was named
chairman of the group while Chung remained honorary chairman.
In auto and personal-computer sales, Hyundai companies moved aggressively. In mid-1992, Hyundai's
new Motor America president, Dal Ok Chung, took over in the Fountain Valley, California,
headquarters. Among other marketing devices, Hyundai offered generous rebates and free two-year
service warranties that covered even windshield wiper blades. By early 1993, Hyundai was offering the
first auto engine it had designed and made itself, as opposed to the Japanese-made Mitsubishi engines
that were used in its earlier models. More than ever committed to the smaller vehicle, Hyundai was
selling autos in more than 100 countries.
In personal computers, Hyundai in mid-1992 took a drastic step when it moved its entire electronics
operation to the United States, the world's largest computer market. Hyundai Information Systems had
already entered the direct personal-computer market, cutting prices and offering toll-free telephone
support and sales. The new operation, based in San Jose, California, had entirely American leadership,
headed by IBM veteran and former CompuAdd president Edward Thomas. The California advantage was
15
mainly proximity to the market, which meant lessened inventory requirements. These developments
showed the Hyundai Group to have the same innovative and energetic approach that had characterized
its earlier ventures.
The latter years of the 1990s brought with them economic turmoil for South Korea. In order to restore
the nation's financial health, President Kim Dae Jung, who took office in 1998, launched a series of
restructuring programs designed to reform the chaebols, many of which had become heavily debt-
burdened. His reforms included changing the ownership, business, and financial structures of the
region's large conglomerates. By this time, the Hyundai Group was responsible for approximately 20
percent of Korea's GDP. As such, its financial health was directly related to South Korea's overall
economic condition.
As a result of government pressures, Hyundai and other South Korean chaebols, including the Daewoo
Group, set plans in motion to sell off many of their businesses in order to pay down debt and shore up
profits. Hyundai's concentration remained on autos, electronics, heavy industry, construction, and
finance. Even as the group struggled under its debt load, it strengthened its holdings with the purchase
of Kia Motors Co. Ltd. and LG Semiconductor.
Despite the government's involvement, Hyundai was slow to comply with restructuring demands. Its
questionable accounting practices often made it the target of negative publicity. Rivalries between
members of the founder's family also led to bad press, leaving many investors anxious about the future
of the group and its member companies. Indeed, many Hyundai affiliates, including Hyundai
Engineering & Construction and Hyundai Electronics, were nearing bankruptcy as debt continued to
spiral out of control. By 2001, total group debt reached W35.87 trillion ($25.59 billion).
Hyundai Motor Co., on the other hand, was prospering as Korea's largest car maker. The auto concern
officially separated from the Hyundai Group in September 2000, signaling the start of sweeping changes
that led to the eventual dismantling of what was once South Korea's largest conglomerate. In August
2001, nine core Hyundai companies, including Hyundai Engineering & Construction and Hynix
Semiconductor Inc. (formerly known as Hyundai Electronics Industries), left the chaebol. The
separation cut Hyundai Group's assets to just $20.8 billion and left it in control of 18 member
companies. Hyundai continued to be pared down the following year.
South Korea had bounced back from its economic crisis of 1997 and 1998 to become a leading global
force in the technology sector. By 2003, foreign investors owned over a third of the shares of
companies listed on Seoul's stock exchange. During 2002, Roh Moo Hyun was elected president of South
Korea. Feeling the pressure from foreign investors, he maintained that harsh reform would continue
within South Korea's chaebols. A May 2003 Business Week article supported the efforts of the new
president, who stated that "slowly and steadily, good governance has been asserting itself in Korea."
Indeed, it appeared as though the powerful, family-run Korean chaebols were a thing of the past.
While this marked an end to the Hyundai Group's history, it pointed to a fresh start for many companies
bearing the Hyundai name.
16
HYUNDAI MOTOR COMPANY HISTORY:
A MODERN RENAISSANCE
17
Giorgetto Giugiaro's ItalDesign firm was hired for styling and design while Mitsubishi
was selected for engine, transmission, rear axle, and casting technology. Hyundai
contracted with former British Leyland Motor Corp president, George Turnbull and six
other British technical experts to serve for a three year period for the development of
Hyundai's first indigenous model, the Pony.
Production began in 1975 and the Pony was officially released in 1976. After the
contract with the British experts ended in 1977, Hyundai hired moonlighting Japanese
engineers to solve remaining issues. With the eventual goal to export automobiles to
the United States, Hyundai released the Pony for testing, certification, and approval in
Europe. Exports of the Pony soon followed and the Pony subcompact was displayed
at the 1978, 56th International Automobile Expo in Brussels. That same year, Hyundai
exported their 10,000th Pony.
18
This 1978 photo commemorates the 1987 Pony II Pickup with a hemi
10,000th Pony export. These are bound engine
for Chile.
19
The 1985 Excel (also known as the Pony, Presto, and a similar Mitsubishi Precis) was
Hyundai's first front wheel drive automobile and was produced until 1994. With the
Excel, Hyundai finally earned their much sought approval to enter the United States
automotive market in 1985. The Excel was offered in two formats: a three door
hatchback and a sedan. In addition to a lengthy list of features, the Excel held a
starting price of less than $5,000. Forbes magazine named it one of the top 10
products of the year and the Excel sold a staggering 126,000 vehicles that year, more
than any other import. A facelifted second generation Excel was sold from 1990 to
1994. Mitsubishi engines were available in 1.3, 1.4, and 1.5 liters.
20
1992 second generation
Excel (click for a larger
version)
21
1986 Hyundai Grandeur / Mitsubishi
Debonair was a Hyundai/Mitsu joint venture
22
Also in 1989 a sport coupe version of the Excel was introduced as the Scoupe (project
code SLC). The Scoupe sold relatively well and was notable as being the first use of
Hyundai's advanced in-house designed, Alpha engine. Available in both naturally
aspirated and turbocharged versions, the Alpha was the first engine designed in
Korea. The original 1.5 liter SOHC engine was later made in a smaller 1.3 liter
version. The Alpha was later used in the Accent and Kia Rio. The Scoupe was sold
until 1994.
Anxious to switch to in-house designs, the short-lived Stellar was replaced by the
Elantra compact sedan in 1991 (project code J1). The Elantra is also known as the
Avante (2nd generation) and Lantra. The name Lantra arose because Mitsubishi
briefly complained that Elantra was too similar to their
Elante trim level. Lotus also complained of the similarity
to the Elan moniker. Note: the Elantra survived longer
than the Elante or Elan and Elantra became the official
name worldwide in 2001. The Elantra was powered by
the 1.6L inline 4 cylinder Beta engine featuring a cast
iron block and aluminum DOHC cylinder heads, MFI fuel
injection, 4 valves per cylinder, and forged steel
connecting rods. It produced about 114 hp at 6,000
rpm. The top speed was 116 mph and it made 22
Second generation 1993
mpg/city. Sonata
23
The Accent subcompact was introduced in 1995 (project code X3) to replace the
Excel. It is also known as the Pony, Excel, Verna, and Brisa. The Accent was
extremely popular in Australia and is still rated as one of the most popular imports of all
time. In 1998 it achieved a 5.5% share of the Australian market. A second generation,
larger Accent was introduced in 2000. Several Alpha engine choices were available
including the 1.5L SOHC inline-4 with 92 hp, 1.5L DOHC inline-4 with 101 hp, and the
1.6L DOHC with 104 hp.
Introduced in 1995, the Accent replaced the Excel and was a very popular
export especially in Australia.
A 1999 Dynasty. For about seven years the Dynasty was sold in a few
markets.
Hyundai introduced a large, premium sedan in 1996, the Hyundai Dynasty. It was only
24
offered in a few markets but was produced until about 2003 and offered a choice of the
Sigma 3.0 and 3.5L V6 producing 205
and 225 hp respectively. The Sigma has
a cast iron block and aluminum DOHC
cylinder heads with MFI fuel injection, 4
valves per cylinder, and forged steel
connecting rods. Note: this engine also
powers the 2001 Kia Sedona minivan,
Santa Fe, XG350, Kia Amanti, and Kia
Sorento.
25
Sonata's third generation release in
1996 (project code Y3) reintroduced
European design elements with a more
upmarket look. As with the previous
generation an inline four was offered as
well as the 3.0 liter Sigma V6. However,
it was the fourth generation released in
1998 (1999 in the United States) that the
Sonata began to take off in North The third generation 1996 Sonata incorporated
America. The European styling more European design elements
influence remained, and the design was
acknowledged by members of the press
as attractive and original. Four engine
choices were offered including 1.8L,
2.0L, 2.4L, and an impressive Delta 2.5L
V6 producing about 170 hp. This
introduction coincided with the 10 year,
100,000 mile warranty in the United
States.
Hyundai's largest and luxurious sedan was introduced in 1999 as the Equus and is
sometimes called the Centennial. It was based upon the front wheel drive Mitsubishi
Proudia. A redesign is due in 2006 with rear wheel drive and an optional V8 engine. A
version is expected to be released in the United States to gauge public reaction to a
26
luxury Hyundai line.
Unlike the first generation, Grandeur's 2001 second generation model (also known as
the XG300 and XG350) did not incorporate Mitsubishi technology. Rather it offered a
choice of the Sigma 3.0 or 3.5L V6. These engines produced 182 and 200 hp
respectively. The Sigma featured a cast iron block, aluminum DOHC cylinder heads,
MFI fuel injection, 4 valves per cylinder, and forged steel connecting rods. It is
interesting to note that this is perhaps the only time that Hyundai's internal project code
(XG) was publicly used in the name of a vehicle. The United States XG350 received a
facelift in 2003.
27
Hyundai introduced a third generation XG300 / Grandeur in 2001 sans
Mitsubishi
CATALYST FOR CHANGE, MONG-KOO CHUNG
When Mong-Koo began broadcasting his intention to turn Hyundai into a top-five
automaker, few outside the company took him seriously. Hyundai, like many family-
controlled Korean companies, was ultra-hierarchical and slow to change. Managers
rarely cooperated with one another and division chiefs ran their operations as personal
fiefdoms. "When a problem occurred, each division would blame other divisions," says
Lee Hyun Soon, Korean head of R&D.
28
Mong-Koo's first step was to replace
members of top management with
engineers. He formulated a strategy to
challenge Toyota for quality. Extensive
work with consultants, J.D. Powers, and
benchmarking of the world's best
automotive companies followed. He also
sent teams to America to study weather,
road conditions, and driver habits. Quality
control staff increased tenfold to 1,000 and
they reported directly to him. Employees Hyundai Chairman, Mong-Koo Chung
were encouraged and rewarded to offer
suggestions. One example that is told is that a worker reported the Sonata and XG350
sedans had differently shaped spare tire covers. Sharing the cover saved Hyundai
about $100,000 per year.
There are reports that the Korean government requested that Mong-Koo step down as
Hyundai Automotive's chairman in 2000 so that it could be led by a non-family
member. Mong-Koo refused, arguing that he was best qualified to lead the company.
Mong-Koo Chung has earned a reputation for an obsession with quality. The new
Sonata's launch in Korea was delayed for two months for 50 items management
wanted fixed. Employees in the Asan factory worked feverishly to correct items such
as a tiny error in the size of the gap between two pieces of sheet metal near the
headlight. The problem was not visible to the human eye and was narrower than 0.1
millimeter. Numerous
managers and employees
worked on the problem for 25
days before it was solved.
29
versions of the Delta engine. Outside of the
US, a 2.0L common rail turbo diesel (CRTD)
was available. Reflecting Hyundai's new
leadership, Hyundai listened to suggestions
from customers around the world and
released a rare 2002 1/2 model refresh
incorporating a larger fuel tank and other
changes. Responding to additional customer
requests more modifications were made in
the 2003 model including gas strut hood lifts,
sunroof, illuminated glovebox, and the Sigma
3.5L V6 engine with 200 hp. Hyundai
2002 Sonata makeover included more
continued to make customer requested European styling cues than ever before
improvements with each subsequent model
year.
30
A brand new second generation Tiburon appeared in 2003 (project code GK). Almost
all of the press was favorable and praised the style and handling of the car. Numerous
automotive writers compared the new car's lines to the famous Ferrari 456GT. Though
acceptable, power for this sports coupe was not Ferrari like and featured the Delta
2.7L V6 with about 172 hp.
Introduced in 2002, the Hyundai Terracan offers a CRTD or Sigma 3.5L V6 engine.
This serious SUV sports a Borg Warner, shift on the fly transfer that can engage 4WD
at up to 100km/hour, and a limited slip differential at the rear wheels. The name
Terracan is a fusion of terra: Latin for earth or terrain and khan: Turkish or central
Asian for ruler or king, as in Genghis Khan.
Plans are underway to bring an SUV larger than the forthcoming Santa Fe to the U.S.
It would be unwise to think that Hyundai engineers do not know how to build a serious
body-on-chassis off-roader. In addition to the Terracan, they have had many years of
experience building their own versions of the Mitsubishi Pajeros as the Hyundai
Galloper for the South Korean market.
A MODERN RENAISSANCE
In 2002 Hyundai initiated its plan to open a manufacturing plant in the United States.
Eventually 1,744 acres of pasture in
Montgomery, Alabama was selected for the
future plant. The grand opening of the $1.1
billion plant occurred on May 20, 2005 and
was attended by thousands including
Alabama governor Bob Riley, former
President George Bush, and Chairman
Mong-Koo Chung. While the plant
employs over 2,000 workers, more than 72 HMMA is the most automated automotive
suppliers have located throughout North plant in the world
America to support the new plant creating
more than 5,000 additional jobs. The 2-
million square-foot manufacturing plant includes a stamping facility, paint shop, vehicle
assembly shop, two-mile test track, and an engine shop. In May 2005, the facility
marked the official start of production with its first saleable 2006 Sonata. Hyundai
Motor Manufacturing Alabama (HMMA) will produce 300,000 vehicles per year at full
capacity including the Sonata and Santa Fe. Using robotics, assembly methods, and a
team structure tested in Asan, the plant is acknowledged as the most automated in the
world.
The first three stages of production: stamping parts from raw metal, welding them into
a frame, and painting the chassis are all done with over 300 robots that move materials
from beginning to end without being touched by human hands. The most labor
intensive part of the process is the general assembly stage, where more than half the
31
line workers are employed to add components. Once a frame is received from the first
three stages, a car can be assembled in six and a half hours. Note: a Honda plant with
similar production capacity in North America requires nearly twice as many workers.
Many cars receive a complete inspection that includes a 2.3 mile road test, a brake
and alignment check, and a five-minute shower in a water test booth to check for leaks
and paint blemishes.
This photo captures guests arriving for the grand opening flying over HMMA prior to the
grand opening ceremony.
After robots complete the first three stages of assembly, a Sonata is completed in 6.5 hours
Sales reached 419,000 in the U.S. in 2004, up an astounding 360% since 1998. With
the exception of a temporary slowdown in sales in the home Korean market, Hyundai
sales are booming around the globe. Sales increased 21% in Europe for 2004 and
Hyundai held a 17% share of the automotive market in India making it the largest
32
foreign car company. Perhaps more surprising: in China's hotly contested emerging
car market, Hyundai's joint venture with Beijing Automotive increased sales 62% for
2005 representing 233,688 cars. Growth came mostly from the Elantra model, the
mainstay of Beijing's taxi fleet and the mainland's second best selling sedan after
China's own Xiali. The company aims to boost production and sales by about 30
percent in 2006 to 300,000 units. Targets call for China production capacity of 600,000
units by 2008. Hyundai is the number one brand in the growing Russian economy.
Sales there increased 72.5 percent in 2005 representing 87,457 automobiles. With a
compounded annual revenue growth of 20% over the past five years, Hyundai has
been the world's fastest-growing major automaker since 1999, according to Lehman
Bros. Even Toyota vice chairman Fujio acknowledged the company that is growing in
Toyota's rearview mirror. "Hyundai has quality and prices that have caught customers'
attention, not to mention ours," he said at an auto conference in August 2005.
DaimlerChrysler sold the 10.5% stake it held in the Hyundai Motor Company in May
2004, ending the four year partnership. In a joint statement, the two automakers
agreed to “realign the alliance in order to reflect more realistically current market
conditions." Under the agreement, Hyundai Motors also assumed DaimlerChrysler’s
50-percent stake in Daimler Hyundai Truck Corp., a joint truck engine factory in South
Korea. The two also scrapped an earlier agreement for jointly making trucks. The deal
started unraveling in September 2003 when DaimlerChrysler announced an alliance
with Beijing Automotive to produce Mercedes-Benz
sedans in the fast-growing Chinese market. Hyundai
already had formed an exclusive partnership with Beijing
Automotive a year earlier to manufacture sedans in
China.
Hyundai's R&D budget has expanded 110% since 1999, to $1.6 billion for 2005. The
33
South Korean R&D headquarters has expanded considerably and now features a three
dimensional cinema for viewing virtual models of new cars. In each year since 2002,
Hyundai has filed a record number of patents for new
technologies.
34
mode until it detects a lack of traction.
A fifth generation Sonata (NF project code) was launched in 2005 as a 2006 model
incorporating competitive and industry leading features. Like the first generation
model, it was designed with the North American audience in mind and includes design
influence from Michigan and California. The Sonata is Hyundai's first release
reflecting a new focus on safety. Reports indicate the company crashed 120 early
Sonatas to perfect the structure and best engineer it to absorb and channel impact
energy around the passenger cabin. It
has earned five star safety ratings for
both front and side impacts. Even base
models include more standard safety
features than any other car in a similar
class including head curtain airbags,
electronic stability control, traction
control, antilock brakes, brake force
distribution, and active headrests.
Several engine choices are offered
including new aluminum Theta 2.0 and
2.4L engines with CVVT (162 hp) and a Fourth generation 2006 Azera/Grandeur
new aluminum Lambda 3.3L V6 with
CVVT (235 hp). Some reports indicate a
hybrid Sonata may be sold in 2007.
Hyundai introduced the third generation Accent at the 2005 New York International
Auto Show (project code MC). The sedan reached dealerships in December 2005 as
a 2006 model. Passenger space has increased considerably over previous models. It
is one inch wider, 1.8 inches longer, and three inches taller than the previous
35
generation. Only the GLS trim level will be offered in America including six airbags,
choice of a five speed manual or four speed automatic, and an updated Alpha II 1.6L
inline four cylinder engine with CVVT (110 hp). Fuel economy is rated at 35/36 mpg
on the highway. A sporty coupe concept has been shown and is expected in 2006 or
2007. Likewise Hyundai has shown hybrid versions of this new Accent indicating it
could reach the Korean market in 2006. It was fitted with a Beta II, 1.4L CVVT engine
(90 hp) plus a 16 hp electric motor which Hyundai indicates boosts fuel economy by
44%.
It is worth noting
that Hyundai
founder, Ju-yung
Chung was one of
the civilian forces
at the head of the
effort to rebuild the
war torn cities of
Vietnam in 1977.
He was made an
honorary
Commander of the
British Empire by
England's Queen
Elizabeth II. In
1982 he was the
first non-American
entrepreneur and
philanthropist to
Ju-Yung Chung (1915 - 2001) is a Korean national hero.
receive an
honorary degree in
To my way of thinking, there may be miracles in religion but not in
business from politics or economics... We succeeded because our people devoted
George their enterprising spirits. They used the force of their minds.
Washington Conviction creates indomitable efforts. This is the key to miracles...
University. He Man's potential is limitless.
received many
other honorary Ju-Yung Chung
degrees including
a doctorate from
John Hopkins University. Additionally he channeled a large amount of Hyundai profits
into philanthropic and civic causes throughout North and South Korea building
hospitals, schools, and apartment complexes for Hyundai workers.
In March of 2001, Ju-Yung Chung was admitted to Seoul's Asan Medical Center. His
36
critical case of pneumonia worsened and he died on March 21st, 2001 in one of the
hospitals constructed by his charity. Ju-Yung Chung was mourned as a national hero
in Korea and was credited with rebuilding a war torn and impoverished nation.
Hyundai officials revealed that in keeping with his wishes that "he had come empty
handed and he would leave empty handed," he gave more than $57 million to the
business he founded in 1946
MANUFACTURING PROCESS
Stamping
In the Stamping Shop, the vehicle begins to take shape. Housed in the shop are large rolls of steel, each
weighing between 20,000 and 40,000 pounds. Cranes are used to lift the rolls and put them into the
blanking machine, where rectangular pieces, thin as a dime, are cut and stored in racks. The pieces are
automatically moved to one of two large, stamping presses with dies molded into various shapes. Over
5,400 tons of pressure transforms the steel blank into a specific body part.
Welding
The Welding Shop containing 280 robots capable of maneuvering and welding body parts. These amazing
automated machines position stamped body parts and accurately weld them together to form the vehicle
body, called a “body-in-white.” Both the Sonata and Santa Fe vehicle bodies move down the same
assembly line at HMMA. Team Members attach hinges, doors, hood and trunk, then check the quality of
each car body to confirm the welding process is perfect.
Paint
The completed “body-in-white” moves from the Welding Shop, along a trestle into the Paint Shop for the
nine-hour painting process. The vehicle first rotates 360 degrees in a unique electrocoat bath to prepare the
entire body for paint. Eighty-one robots apply primer, a base coat using one of 15 different water-based
paint colors, and a final clear coat which provides a beautiful shine and long-lasting protection. Since the
Paint Shop is an environmentally-controlled area, Team Members must wear special overalls and gloves to
37
protect themselves and the paint’s finish. A single particle of dust can affect the overall quality of a vehicles
paint finish. The Paint Shop has over four miles of conveyor systems to move the vehicle bodies through
each different process. After drying, the freshly-painted vehicle body heads to General Assembly.
General Assembly
General Assembly houses approximately 1,150 Team Members who install a variety of parts to complete the
vehicle. The painted vehicle body moves through the trim area where wires, brake controls, and other parts
are quickly connected inside the vehicle, under the hood, and in the trunk. The doors are taken off early in
the process and sent to another area where speakers, power windows, door seals and other parts are
installed. In the chassis area, the underside of the vehicle is completed and the engine and drive train are
connected to the body. After the tires, battery, front and rear glass, and seats are installed, the doors are
reattached to the vehicle. Oil, engine coolant, gasoline and other vital fluids are added, and then the vehicle
is started for the first time. A roll booth tests the braking system and then the vehicle is driven on a two-
mile test track to check for rattles or other issues. A shower test checks for leaks and once a vehicle meets
all quality standards it is ready to be shipped to a dealer in North America.
Engine
HMMA takes pride in having its own Engine Shop. The Hyundai V-6, 3.3l engine, producing 235 horsepower
is made here on site in Montgomery. Castings of engine blocks, heads and crankshafts are delivered from
suppliers and machined to HMMA’s exact specifications. Over 150 computer-controlled machines perform
precision cuts to these engine parts. A sophisticated test laboratory performs precision computer
measurements to ensure the machining process cuts and drills the metal to proper specifications. After
machining and precision measurement testing, the parts are moved along a conveyor system to engine
assembly where Team Members follow detailed procedures to assemble pieces of the engine. All engines
are first cold-tested for leaks, then hot-tested, by starting the engine to ensure it meets manufacturing
specifications. A Hyundai transmission is then married to the new engine to complete the assembly
process. After a final quality check, the engine is sent on a trestle to the chassis section of General
Assembly where it is attached to the drive train and the rest of the vehicle.
Quality
Quality checks are built into each step in the production process. Each vehicle has to pass a series of
stringent tests, including satisfactory performance on a two-mile test track.
Production Control
In the production control department, HMMA manages whole supply chain activities and the network,
beginning with our customer order, moving from suppliers to manufacturers, then distributors to dealers,
and then customers along a chain.
Hyundai's 6th manufacturing unit outside the parent country, is also the group's largest overseas
production base. Even as the project was being conceptualized, Hyundai Motors India Ltd.(HMIL) was
always going to play an important role in Hyundai Motors Company's international operations.
38
That the company is fully owned by the parent group and the integrated unit at Sriperambudur can today
roll out cars with almost 85% localized content, bears testimony that the Indian operations have been put
down to play an important role in Hyundai's goal for the 21st century - to be joint the ranks of the GT-10
(Group 10) Companies.
The Infrastructure
The Hyundai India plant located in Irungattukottai, 30 kilometers from Chennai was
built in record time. The plant is first self-sufficient manufacturing unit in India to be
independently invested by an overseas automobile company. Incorporated in May
1996, the groundbreaking ceremony for the Chennai plant was held in December in
the same year, and the first pilot Santro was ready in a record-breaking 17 months.
The plant which stands on a 500+acre plot has been built with an initial investment of more than Rs. 2500
crores. It has a capacity to make 120,000 cars and 130,000 engine transmission units per annum
and is the largest overseas investment made by the Korean Company.
HMIL commenced operations with 70%-localized content, which is one of the highest amongst all car
manufacturers. The entire powertrain and the body panels are made in-house and the integrated
manufacturing setup at the Hyundai Motors Chennai plants consists of:
Hitachi Zosen 2500 ton presses for the body panels State-of-the-art Paint shop Final assembly line
Engine and transmission lines Aluminum foundry Plastic extrusion unit In-house R&D Centre
Hyundai has brought in 14 Korean companies and helped them setup base in India for sourcing
components. The total vendor base consists of 60 companies located at the plant site itself. HMIL aims to
increase localized content to over 90% in the millennium.
The Present
Although the HMIL is said to have initially planned to launch their Indian operation with a car for the mid-
sized segment, the company changed policies and introduced the Santro for the small car market. A
decision which in hindsight, seems to have paid handsome dividends.
A formal study was commissioned by Hyundai prior to the launch of the Santro, to gauge the - as Mr. BVR
Subbu, Director Marketing & Sales says - "stated and not-so-stated" needs of the Indian small car
buyer. Several factors right from the design of the car, the cooling of the AC, and the dealer network have
been on the basis of the study so as to present to the people the kind of car that they want and need. The
Santro has been designed by in-house Hyundai expertise.
Modeled on the Hyundai Atos, the Mercedes A140 and Suzuki's Wagon R, and
then customized to Indian tastes, the Santro takes the best of all the cars viz. the
driveability of the Atos, the safety & design of the Mercedes A140, and roominess of
the Wagon R.
The Santro (which is available in three variants - the L2, GLS1 and GLS2) was
launched in September 1998, and the company has targeted a production of 60,000 Santros per year.
With sales of 30,000 vehicles in the last eight months HMIL seems to be fairly on target.
The monthly sales of the Santro (from October 98 to August '99 are given below)
Month Oct Nov Dec Jan Feb Mar Apr May June
Units 1123 3444 3881 2753 2157 4290 3531 4519 4634
39
Month July AugustHyundai Santro has captured 30%of the market share in the small car segment and
Units 4,949 7002 10% in the overall auto industy
The cumulative sales of the Hyundai Santro( Oct '98-Aug '99) are 42,283 units.
The Future
Hyundai Motors India Ltd. plans to build a world-class facility, which will offer quality products and
services to the discerning consumer. It plans to enforce the " global optimum production system", setting
its goal to achieve the utmost result with the lowest running cost
The Indian operations will play an important role for Hyundai to develop and expand their presence in the
neighboring South East Asian countries and plans to export the Santro as SKDs (semi-knockdown kits)
and CBUs (completely built units) to the neighboring countries like Pakistan, Bangladesh, Nepal and Sri
Lanka.
In fact the Santro has been launched in its parent country under a new name the Visto The body panels
and the engine as well as the transmission components are entirely imported from India, and the Visto is
being assembled by HMC at their Ulsan Plant. By doing so HMIL has created a record of sorts. As Mr.
BVR Subbu, managing director of HMIL says "This is first time in the history of the Indian passenger car
industry that an international product has first made its debut in the Indian market and then taken from its
shores to parent company's domestic market"
The company also has plans to introduce several new models in the
Indian market, and the pre-production and road tests of its next car are
already being conducted. Code-named the LC-I, HMIL plans to introduce a
mid-sized (1400 - 1800 cc) car in October 1999. Although similar to the
Hyundai Accent which already sells in Korea, the LC-1 (like its predecessor
the Santro) has been specially designed for the Indian market at the
Hyundai Design Centre at Namyong, Korea. The company also plans to
launch at a later date a multi-utility vehicle in the Indian market. By the year 2000 HMIL will employ
around 3000 workers operating in multiple shifts.
Mr. H. S. Lheem, The Managing Director of Hyundai Motor India, has with him the vast
experience of handling the overseas business across the Globe.
40
Mr. Lheem has moved to India from Hyundai’s Turkey operations, where he was
heading the Overseas Operations of the Turkey plant, on December 2005.
Engineering Graduate from Yonsei University in Metallurgy, Mr. Lheem began his
career with Hyundai Motors Company in 1973 at local parts development department.
He was headed for Overseas Operation in Canada in 1985.
He was given the duty to work as a liason officer in between Hyundai Motor Company
and Mitsubishi Motor Sales of America in Los Angeles (U.S.A) in 1988 and then later
gaining a lot of experience in Overseas Market, because of his Managing skills and
strategies in handling the Overseas Market he was promoted as The Director in-charge
for Overseas Export Project, in 1995. After that he also spent five years looking after the
Overseas Export Service Operations.
Since then he has never looked back and with his capabilities and strength he has been
making Hyundai reach heights in the Western part of the globe.
To strengthen the base of Hyundai in Western Globe Mr. Lheem was sent to Turkey to
handle the operations in 2004, September and was promoted as The Managing Director
to lead the Operations in Turkey.
Mr. Lheem, as The Managing Director of HMI, is here in India now, ready to take
Hyundai Motors India to new Heights.
After more than 20 years in the U.S. automobile market and with "America's Best
41
Warranty," Hyundai continues to reinforce its commitment to sell innovative, high-quality
vehicles at affordable prices.
Benefits of adopting the ISO/TS 16949 standard include improving quality of processes at
the facility along with streamlining supply chains, both leading to a better overall product.
In the pioneering spirit of challenge, we are actively taking the lead to promote change and innovation
which will generate a competitive edge. And we believe in the importance of pursuing harmony and co–
existence with all of our stakeholders for mutual benefit.
We genuinely value your comments and ideas on our efforts to uphold the values of sustainability. We
would like to thank all stakeholders and concerned parties for your continued interest and support.
42
HYUNDAI I-10
Hyundai-i10 is launched in India at Rs 3.4 lakh. The car is first launched in India. This small car is also
comfortably priced to be placed in the mid segment. The Hyundai has also slashed the price of its Santro
car by Rs 40,000. The engine is 1.1 litre with petrol and diesel variations The ABS and air bags are
optional accessories and it Hyundai-i10 is launched in India at Rs 3.4 lakh. The car is first launched in
India. This small car is also comfortably priced to be placed in the mid segment. The Hyundai has also
slashed the price of its Santro car by Rs 40,000. The engine is 1.1 litre with petrol and diesel variations
The ABS and air bags are optional accessories and it also plans to export cars from India through the
Chennai plant.also plans to export cars from India through the Chennai plant.
The Hyundai i10 with its exclusive launch in India is powered by a 1.1 litre iRDE petrol engine. The engine
has a 5 speed manual transmission with a i-shift gear box which clears up the space between th driver
and the passenger which is a unique feature for this segment cars. Electric power steering option is also
available with other models.
The Hyundai i10 has a attractive front grill with large headlmaps, and offers enough boot space to seat 5
people. All Hyundai i10 models have AC/heating, folding rear seats, dual tone beige interiors, rear seat
belts and an electronic trip and odometer as standard equipment. The top end car of the i10 has a sun
roof which is agin a unique feature of the cars in the segmnt. There is a rear spoiler, leather covered
steering wheel and gear knob, keyless entry with 2 DIN audio system. The steel body is light and has
body coloured bumpers.
A tilt steering wheel makes it easy for the driver to find the spot-on driving position. A wheelbase of 2380
mm which is the longest in this segment gives it the additional stability and added cabin space. Tubeless
tirs are in all the models and other top safety features like Anti lock braking system (ABS), seat belts with
43
pretensioner, dual airbags for th edriver and the front passenger, auto unlocking doors which
automatically unlock on sensing an impact and a high mounted rear stop lamp.
There are 10 exicting colours and it holds a 2 year warranty. The Hyundai i10 has four variants like the D-
Lite, Era, Magna and the Auto. The high end car is the magna.
The i-10 offers competition to Wagon-R, Chevy Spark and the Zen Estilo.
Awards
44
Rs. 364026.00 Rs. 404501.00 Rs. 433515.00
VEHICLE SUMMARY
Body Type: Hatchback Hatchback Hatchback
Segment: B+ Segment B+ Segment B+ Segment
Top Speed: - - -
0 to 60: - - -
0 to 100: - - -
Fuel Consumption: Highway - - -
Fuel Consumption: City - - -
Warranty: - - -
OUR RATINGS
Appearance:
Comfort:
Features:
Performance:
Value for money:
ENGINE SPECIFICATIONS
1200cc, 16V, Kappa,
Displacement: 1086cc, In-line, 4 cylinder 1086cc, In-line, 4 cylinder
DOHC
Engine Type: Petrol Petrol Petrol
Maximum Power: 66.7ps@5500rpm 66.7ps@5500rpm 80bhp@5200rpm
Maximum Torque: 10.1kgm@2800rpm 10.1kgm@2800rpm 11.4Kgm@4000rpm
Power to Weight Ratio:
DIMENSIONS
Length: 3565 mm 3565 mm 3565 mm
Width: 1595 mm 1595 mm 1595 mm
Height: 1550 mm 1550 mm 1550 mm
Headroom: - - -
Rear Leg Room: - - -
Rear Seat Width: 0.00 cm 0.00 cm 0.00 cm
OTHER SPECIFICATIONS
Seating Capacity: 5 5 5
Tyre Size: 155/80 R13 155/80 R13 155/80 R13
Suspension: - - -
Turning Circle: - - -
Boot Space: - - -
Steering: Power Power Power
Brakes: Front Disk, Rear Drum Front Disk, Rear Drum Front Disk, Rear Drum
Gears: 5 Manual 5 Manual 5 Manual
Ground Clearance: 165.00 mm. 165.00 mm. 165.00 mm.
Kerb Weight: 860.00 kgs. 860.00 kgs. 860.00 kgs.
Fuel Tank: 35.00 ltrs. 35.00 ltrs. 35.00 ltrs.
45
Body Color Bumpers:
Tachometer:
Alloys:
ORVM Indicator:
Xenon Headlamps:
Trip Meter: 2 2 2
Headlamp Washer:
COMFORT
AND CONVENIENCE
AC: AC AC AC
without Climate Control without Climate Control without Climate Control
Power Windows:
Central Locking: None Manual Manual
Remote Boot:
Rear Wiper:
Rear Defogger:
Rear Armrest:
Streeing Adjustment
(Rake/Reach):
Driver Seat Adjustment: Manual Manual Manual
Music System: - - MP3 Player
Leather Seats: - -
Door Mirror: Both Side Both Side Both Side
Tinted Glass:
Rear AC Vent:
Sun Roof:
Buttons/Controls on
Steering:
Auto Viper:
Auto Headlamp:
46
ACTIVE AND PASSIVE SAFETY
Airbag:
Parking Sensors:
Fog Lamp:
Traction Control:
EBD:
ABS:
ESP:
Rear Seat Belts: 2 2 2
Vehicle Comparison
Maruti Hyundai
Wagon R VXi i10 Sportz
VEHICLE SUMMARY
Body Type: Hatchback Hatchback
Segment: B Segment B+ Segment
Top Speed: 151 kmph 150 kmph
0 to 60: - -
0 to 100: - -
Fuel Consumption: Highway 13.00 kmpl -
Fuel Consumption: City - -
Warranty: 2 year or 40,000 km 2 years
OUR RATINGS
Appearance:
Comfort:
Features:
Performance:
Value for money:
47
ENGINE SPECIFICATIONS
Displacement: 1061cc , 4 cylinder 1200cc, 16V, Kappa, DOHC
Engine Type: Petrol Petrol
Maximum Power: 62bhp@6000rpm 80bhp@5200rpm
Maximum Torque: 8.4kgm@3500rpm 11.4Kgm@4000rpm
Power to Weight Ratio:
DIMENSIONS
Length: 3520 mm 3565 mm
Width: 1490 mm 1595 mm
Height: 1660 mm 1550 mm
Headroom: - -
Rear Leg Room: 59.5/76.5 cm -
Rear Seat Width: 0.00 cm 0.00 cm
OTHER SPECIFICATIONS
Seating Capacity: 5 5
Tyre Size: 145/70R13 155/80 R13
Suspension: - -
Turning Circle: 9.20 mtrs. -
Boot Space: - -
Steering: Power Power
Brakes: - Front Disk, Rear Drum
Gears: 5 Manual 5 Manual
Ground Clearance: 165.00 mm. 165.00 mm.
Kerb Weight: 755.00 kgs. 860.00 kgs.
Fuel Tank: 35.00 ltrs. 35.00 ltrs.
Body Color Bumpers:
Tachometer:
Alloys:
ORVM Indicator:
Xenon Headlamps:
Trip Meter: - 2
Headlamp Washer:
COMFORT
AND CONVENIENCE
AC AC
AC:
without Climate Control without Climate Control
Power Windows:
Central Locking: Remote Remote
Remote Boot:
Remote Fuel Filler:
Rear Wiper:
Rear Defogger:
48
Rear Armrest: -
Streeing Adjustment
(Rake/Reach):
Driver Seat Adjustment: Manual Manual
Music System: - CD player with four speaker
Leather Seats:
Door Mirror: Both Side Both Side
Tinted Glass:
Rear AC Vent:
Sun Roof:
Buttons/Controls on
Steering:
Auto Viper:
Auto Headlamp:
Parking Sensors:
Fog Lamp:
Traction Control:
EBD:
ABS:
ESP:
Rear Seat Belts: - 2
49
CHAPTER-5
“Research methodology”
Problem Definition: -
Comparative analysis of consumer preference between Hyundai’s i-10 and
Maruti’s wagon-R
Purpose of Research:-
To know about costumer preference about i-10 and wagon-r. How much consumer
prefers the brand in area of jaipur city.
Variable:-
Brand of vehicle
Fuel economy
Technology
50
Engine performance
Easy loan availability
Discount & scheme availability
Low maintenance
High resale value
Price
Power.
Research Design: -
Descriptive: -
To find out features which determine the costumer preference of i-10 in Morani
Hyundai at jaipur.
51
Data Collection:-
Instrument: Questionnaire
Method: Most of the primary data are collected through direct personal
interview with the use of structured question. Secondary data are taken from the
net and magazine and news paper.
Table-1
(1) Rank in the order of preference the following factors you consider
while buying a new car.
FEATURES Frequency of
respondent
Brand of vehicle 20%
Interior space 6%
Fuel efficiency 18%
Technology 5%
Engine performance 11%
Easy loan availability 7%
Discount & scheme 5%
availability
Low maintenance 6%
High resale value 6%
Price 13%
Power 3%
52
Findings:-
Table-2
Finding:-
53
30% Responded prefer internet.
Table-3
(3) At the purchasing time customer most focus on:-
Finding:-
22% Responded prefer Authorized dealer
20% Responded prefer Auto finance company
23% Responded prefer Agent of the dealer/broker
35% Responded prefer Authorized dealer & Auto finance
company.
54
Table-4
(4) Rank order the following brands against the features indicated.
55
Steering wheel-leather wrapped A A
Digital clock A+ B
Low fuel warning lamp A+ B
Seat belt warning A+ A+
Battery saver B B
Power windows A+ A+
Air conditioner with heater A+ A+
(1) FINDING:-
These factors get A+ grade in I-10 cars:- Clear lens head grill& bumper
Vibrant color’s
Wheelbase
Power windows
Digital clock
Sunroof
56
Metal finish inside door handles
Power windows
Stylish fabric
Central locking
Vibrant color’s
Stylish fabric
Central locking
57
Battery saver.
TABLE:-5
Finding:-
58
30% Responded prefer ‘B+’ Segment car.
18% Respondent prefer ‘C’ Segment car.
10% Responded prefer ‘D’ Segment car.
CHAPTER-7
CONCLUSION
59
2. Most of customer prefers internet advertisement.
CHAPTER-8
Limitation of the research:-
1. The study was restricted to Jaipur city only, so it was difficult to generalize the
interpretations would be make out of the findings.
2. Limited knowledge of the researcher in the field of research may lead to
interpretation errors.
3. The research was based on primary collection of data through Structured
Schedule, so there may be chances of human error and biasness.
60
4. The research was dependant on the information provided by the respondents
who were very reluctant in providing right information and often provides
carelessly and results are drawn out by only these information. So, sometimes all
effort might fail to find the right result.
5. As associated with every project, time and money were the major limitations
with project.
6. The conclusions arrived at, are based on a very less experience of the
researcher in this field.
CHAPTER-9
61
I-10 variants should have air bag and anti lock break system is
standard.
4. Company should provide more batter service center.
5. Company should provide batter seat adjustable head rest in
Versions D’lite and Era.
62