1. CHAPTER-1
INTRODUCTION
This project is made on the project title Comparative analysis of
consumer preference between Hyundais i-10 and Marutis wagon-R
Jaipur city
The purpose of this project is to know consumer preference about
i-10 & wagon-r.
To create awareness about the i-10 features.
2. To create awareness about the Vehicle of Hyundai
Company.
3. To create awareness & to tell the people what is
importance of features of vehicle.
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
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.
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.
Automobile Trend t - 3rd in a series
A
Key Challenges
The ability of people and goods to move and to be moved in an
efficient way is essential for economies to prosper. However, if
current trends continue, the growth in transport activity will lead
to an increase of greenhouse gas (GHG) emissions to a level that is
not sustainable. There will be a substantial negative impact not
only on social and environmental values, but also on economic
growth.2
The automotive sector is a major source of CO2 emissions,
representing approximately one quarter of global anthropogenic GHG
emissions. In order to follow the Kyoto protocol, several of the
worlds major automotive markets have adopted policies to reduce
vehicle-related CO2 emissions. In the typical life cycle of an
automobile 75% of automotive-related emissions occur during vehicle
use (19% during fuel production, 4% during the production of
materials/components, and 2% during assembly work).3
Thus, fuel economy and CO2 emission standards offer the best
prospect for reducing vehicles contribution to climate change. In
the European Union, a dialogue between regulators and the
automotive industry trade association (ACEA) inspired a voluntary
commitment from the industry to reduce CO2emissions from passenger
cars to a level of 140 g CO2/km by 2008. Depending on progress,
ACEA may extend the target to 120g CO2/km by 2012.
According to the Clean Air for Europe (CAFE) programme the
pollutants of most concern for human health from road transport are
airborne particulate matter (PMs) which are precursors of smog and
other poor air quality problems, as well as the ozone that is
formed by the reaction between hydrocarbon (HC) and nitrogen oxide
(NOx).While the ACEA voluntary agreement (see key challenge Fuel
Efficiency & Climate Change) targets the reduction of CO2
levels, Euro 4 and Euro 5 aim to regulate the vehicular emission of
PMs, HC and NOx. The Euro 4 standard came into effect in 2005. Euro
5, which could be introduced by mid-2008, has been submitted by the
European Commission, although its final form is still unclear. The
main priorities are to further reduce emissions of PM and No with
the introduction of a limit value of 5 milligrams per kilometer for
PM (-80%) and a NOx limit value of 200mg (-20%) for diesel cars.
The commission is also considering proposing reductions in the
emission limits for petrol cars (a 25% reduction in NOx as well as
in hydrocarbons).
In 2000, approximately 1.2 million people worldwide died as a
result of road traffic injuries, and another 7.8 million were
seriously injured.5 In Europe, every year road traffic accidents
kill more young people aged 5 to 29 than any other cause of
death.6
The number of road deaths by inhabitant sharply rises in the early
stages of motorization when people can afford to buy motorcycles
first, and then cars as is happening in India and China.
The World Health Organization in Europe considers speed as the
single most important determinant for safety in road transport
systems. They call for new road safety thinking that 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 2C 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.
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 cars 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.
Indian auto sector set for higher growth
CMYK
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, KamalaNath. 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
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
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 Jag dish Khattar, Managing Director, Marti
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 epresenting 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.
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.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.
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 marketbuyer. 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.
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
Telephone: (02) 746-1114 Fax: (02) 741-2341
http://www.hyundaicorp.com 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
Company History:
Vision, mission & value:-
Hyundai has experienced tremendous growth, establishing a global
management and quality improvement system, based on our midand
longterm 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
customeroriented 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 brandimage 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 worlds 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 environmentallyfriendly 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 globallyfocused 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, 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.
Explosive Postwar Growth
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.
Expansion into Shipbuilding: Early 1970s
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.
Focusing on Auto Production: Mid-1970s
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.
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.
Tough Times for HHI: 1980s
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.
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.
Challenges for Hyundai Motor in the 1980s
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.
Hyundai in the Early 1990s
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 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 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 Dismantling of Hyundai
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.
Principal Competitors: LG Group; Samsung Group; SK Group.
left0HYUNDAI MOTOR COMPANY HISTORY: A MODERN RENAISSANCEHYUNDAI
FOUNDER, JU-YUNG CHUNGHyundai founder, Ju-Yung ChungThe beginning
of Hyundai Motor Company dates to April 1946 when founder, Ju-Yung
Chung established Hyundai Auto Service in Seoul, South Korea at the
age of 31 years. The name Hyundai was chosen for its meaning which
in English translates to modern. The Hyundai logo is symbolic of
the company's desire to expand. The oval shape represents the
company's global expansion and the stylized " H"is symbolic of two
people (the company and customer) shaking hands.Hyundai Motor
Company was founded by Ju-Yung Chung and younger brotherSe-Yung
Chung in December 1967. In 1968 the company entered into a contract
with Ford motor company to assemble the Ford Cortina and Granada
for the South Korean market and continued to produce them until
1976. Hyundai completed construction of the Ulsan plant in six
months and achieved the shortest groundbreaking to first commercial
production of any of Fords 118 plants. The eight year journey
provided Hyundai with assembly knowledge, blueprints, technical
specifications, production manuals, and trained Hyundai
engineers.The new Ulsan Hyundai plant just prior to opening in 1975
is already producing the Pony Fuel tank inversion testing at MIRA
in the U.K. circa 1977 Work begins on the design ofPony 2 with this
wood modelTHE FORMATIVE YEARSTo stimulate economic growth, the
South Korean government formulated a detailed plan for the
development and manufacture of Korean cars by 1975. Four Korean
companies: Hyundai, Daewoo, Kia, and SSangyong accepted the
challenge. Hyundai submitting a plan for a new plant with a
capacity of 80,000 Korean designed cars to be produced each year.
Hyundai approached 26 firms in five countries to acquire the
additional technologies required.10 firms in Japan and Italy for
car design 4 firms in Japan and the United States for stamping
equipment 5 firms in the United Kingdom and Germany for casting and
forging equipment 2 firms in Japan and the United Kingdom for
engines 5 firms in the United States and United Kingdom for
automotive parts 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.Working toward export approval in Europe and eventually the
U.S., Hyundai participated in the 56th International Automobile
Expo in BrusselsThis 1978 photo commemorates the 10,000th Pony
export. These are bound for Chile.1975 Hyundai Pony1977 Hyundai
Pony Wagon1987 Pony II Pickup with a hemi engine 1985 Hyundai Pony
2Hyundai made the most of the Pony design as it was available in
several configurations. A Pony pickup was introduced in May 1976, a
station wagon in April 1977, and a three door hatchback in March
1980. A refreshed Pony II was released in January 1982 in a choice
of five door hatchback or pickup. Both the Pony and Pony II offered
three Mitsubishi engine choices including a 1.2L, 1.4L (70 hp), and
a 1.6L (74 hp). These engines were SOHC hemispherical with two
vales per cylinder. Starting in 1985 the HD badging was replaced
with Hyundai spelled out and air conditioning was offered with the
1.6L engine. It is interesting to note that a 1.6L GT package
included a leather-wrapped Momo steering wheel, tachometer, fog
lights, and unique badging. While Hyundai only expected to export
5,000 Pony IIs to Canada in 1984, over 50,000 were sold.1983
Hyundai Stellar 1986 Canadian spec Hyundai Stellar 1989 Hyundai
ExcelFor the next few years, Hyundai applied the knowledge gained
from the Pony and set to work on two new projects. One was a
subcompact Pony replacement that would come to be known as the
Excel. The other was a compact sedan to replace the Ford Cortina
and would be badged the Stellar. The 1983 Stellar made use of the
rear wheel drive Cortina chassis, but wore a body designed by
Giorgetto Giugiaro. Many luxury options were offered such as power
windows, locks, and mirrors, remote fuel door and trunk, and air
conditioning. Likewise several engine choices were offered
including 1.4 and 1.6 liter models licensed from Mitsubishi. In
1987 the Stellar II was released with a redesigned 2.0L engine. The
original Stellar's double wishbone suspension was changed to a
MacPherson strut design. Emission restrictions prevented the
Stellar from reaching the United States, but it was exported to
Canada and other countries.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.A 1985 US EPA document, providing
Hyundai with approval to enter the US market.This 1986 photograph
shows Excels being loaded for the first export to the United
States. 1,050 Excels are queued for the journey.1986 U.S. Excel
Hatchback advertisement (click for a larger version)1986 U.S. Excel
sedan advertisement (click for a larger version) 1992 second
generation Excel (click for a larger version)1986 Hyundai Grandeur
/ Mitsubishi Debonair was a Hyundai/Mitsu joint venture Asan,
Hyundai's third plant in the process of construction in August
1989.RAPID EXPANSION AND GROWING INDEPENDENCEIn 1986 for the
follow-on to the Ford Granada sedan, Hyundai rebadged the
Mitsubishi Debonair as the Hyundai Grandeur. The first generation
Grandeur was offered until 1992 when Hyundai partnered with
Mitsubishi to develop the next generation (which became the third
generation Mitsubishi Debonair). Hyundai designed the body and trim
while Mitsubishi was tasked with the powertrain.The success of
Excel led to plant expansions at home and abroad. Design on a new
Korean plant in Asan began in October 1988 and the 40 acre plant
was opened in 1990 at a cost of 250 billion won. Asan specialized
in sedans including Sonata and XG/Grandeur. In North America,
Hyundai opened a plant in Bromont, Quebec, Canada. Over the years
the Ulsan plant grew to cover over 4.8 million square meters making
it the largest automotive plant in the world. Ulsan is production
home of the Getz, Accent, Elantra, Coupe, Santa Fe, Trajet, Matrix,
H-1, H-100 and Terracan. Another Korean plant in Chunjoo
specializes in trucks, buses, and specialty vehicles.During this
rapid period of growth, Hyundai leveraged other Hyundai divisions
to optimum advantage. This included electronics, robotics, steel
stamping, and even Hyundai's massive shipyards.Hyundai's first
in-house design, the 1989 Sonata included a Mitsubishi licensed
engine but with Hyundai's own multipoint fuel injectionHyundai
Scoupe included the first engine designed in Korea. 1991 Elantra
was powered by the 1.6L DOHC Beta engineAs Hyundai's engineers gain
more experience, they continue to implement more of their own
technology and refinement. This work and the new Asan plant
culminate in Hyundai's first entire automobile using their design
and technology: the first generation, 1989 Sonata. Designed with
the North American market in mind, the first generation Sonata was
styled by Giorgetto Giugiaro's ItalDesign firm. Some were
manufactured in Korea and some in the Quebec plant. Multiple Sirius
engine choices (including SOHC and DOHC options) were offered for
various markets. It should be noted that the engines still
implemented Mitsubishi design elements. American models were
originally offered with a 2.4 liter inline 4 with 110hp, but a 3.0
liter V6 was introduced in 1990. Other markets received either a
1.8 liter (95hp) or 2.0 liter (131hp) engine. 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 andit made 22 mpg/city.Second generation 1993
Sonata The second generation Elantra was sold briefly as a wagonThe
second generation Sonata was introduced in 1993 (project code Y2)
featuring a more modern shape reminiscent of the Mazda 626 and
Honda Accord. Engine choices included a 2.0L inline 4 and an
optional SOHC Sigma 3.0L V6 producing about 150 hp. This Sonata was
originally produced in both South Korea and Canada but mostly due
to falling sales, the Bromont, Quebec plant was shuttered in 1994.A
second generation Elantra debuted in 1995 (project code RD) in
sedan and station wagon styles. Engine choices included the 1.6 and
2.0L Beta as well as a 2.0L turbodiesel (not in the U.S.). The
Elantra was facelifted in 1998.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 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.After a one year break, the
1996 Tiburon replaced the Scoupe.After a short break following the
end of Scoupe production, Hyundai introduced a new coupe in 1996,
the Tiburon (project code RC). In various markets, it is also known
as the Coupe, Turbulence, and Tuscani. It was initially offered
with a choice of a 1.6 or 1.8L Beta engine with 114 or 129 hp
respectively. The Tiburon was first introduced to the United States
in 1997 with a 1.8 or 2.0L Beta engine. The 2.0L produced 135 hp. A
redesign in 1999 offered a newer 2.0L Beta engine.The third
generation 1996 Sonata incorporated more European design elements
Fourth generation 1999 SonataSonata'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 America. The European styling
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.A subcompact
economy car, the Hyundai Atos was introduced in 1997. It is also
known by the names Atos Prime, Amica, Dodge Atos, Santro, and Kia
Vista. A second generation version was introduced in 2003.ASIAN
FINANCIAL CRISISAsian financial markets and companies faced a
difficult period at the end of the 20th century. Some smart
companies like Hyundai made the best of a very difficult situation.
It was during this time that Hyundai reduced its workforce and sold
a number of assets. Kia Motors was faltering and did not have the
resources needed to continue. In 1998 Hyundai Automotive purchased
a significant amount of Kia anticipating the synergy of the
combined competitors.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 luxury Hyundai line.In
his drive to build the world's largest car and truck company,
DaimlerChrysler Chief Executive Jrgen Schrempp purchased a 10.5%
stake in Hyundai Motor in June 2000 with the plan to build small
cars and 100,000 trucks a year in a 50-50 joint venture.The
facelifted 2002 Elantra GT featured sportier handling and leather
seatingThe Elantra appeared in its third generation in 2000
(project code XD). The wagon was no longer available and was
replaced with a 5 door hatchback. While it bares a compact
exterior, the EPA classified it as a midsize because of the
generous room inside. The 1.6 and 2.0L Beta engines provided good
power and fuel economy rated at 27 mpg city and 34 mpg highway. In
2002 an updated Elantra GT featuring leather seating and a sharply
styled back was release. The Beta II engine with CVVT was also
offered on subsequent versions of the Elantra sedan.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.Hyundai introduced a third generation XG300 / Grandeur in 2001
sans MitsubishiCATALYST FOR CHANGE, MONG-KOO CHUNGFather and son:
Ju-Yung and Mong-Koo Chung in 2000The leader of the Hyundai-Kia
Automotive Group was changed by founder, Ju-Yung Chung in 1999
after the Asian financial crisis and government mandated breakup of
the Hyundai Group. Previously the automotive group was being
managed by the founder's brother. His son, Mong-Koo Chung had
performed well managing Hyundai's after-sale service and
dealerships. Mong-Koo was the catalyst of an extreme turnaround for
the company. During the 80s and 90s, his uncle focused on Hyundai
Automotive's growth and producing as many cars as possible. Product
quality and customer satisfaction suffered. From his experience
working with dealerships and angry Hyundai customers, Mong-Koo knew
well the damage to the Hyundai reputation and the high cost of
warranty repairs.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.Hyundai Chairman, Mong-Koo ChungMong-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 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.The Sonata based Santa Fe crossover entered
the market in 2001Hyundai entered the crossover, sport utility
market in 2001 with the Santa Fe (project code SM). In addition to
being a big hit for the company, it was a turning point and major
milestone of the company's restructuring. Initially the Santa Fe
was offered with a choice of two engines: a fuel efficient but
underpowered Sirius 2.4L (138 hp) or the Delta 2.7L V6 (about 170
hp). Note: the initial introduction of the 2.7L Delta contained a
flaw which Hyundai corrected for owners and solved in future
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 continued to make
customer requested improvements with each subsequent model
year.Hyundai introduced a new subcompact, city car in 2002, the
Getz. Available in a choice of 1.1, 1.3, or 1.6L engines and a 1.5L
common rail turbo diesel. Reviews frequently mention the manual
transmission has the best feeling shifter yet. Fuel economy for the
various conventional engines is in the high 40s with over 60mpg for
the diesel.2002 Sonata makeover included more European styling cues
than ever beforeSonata-based Tiburon is favorably compared to a
famous Ferrari design 2003 Hyundai Terracan includes serious
offroad ability and luxury features like Xenon healightsIn keeping
with Hyundai's renewed focus on customer satisfaction, the Sonata
likewise received a dramatic facelift in 2001 (2002 in the U.S.).
The exterior took on a much more European look reminiscent of the
third generation but with hints of Mercedes and Jaguar. The
interior was restyled and the seats replaced with the more
substantial seats used in the XG. The drivetrain was updated and
improved to include the Delta 2.7L V6 and Shiftronic manually
shiftable automatic transmission. The redesign was well received
with sales increasing to higher record levels with each passing
year. However, Hyundai did settle a class-action lawsuit over
published horsepower numbers on the Sonata, Santa Fe, and to a
lesser degree Elantra. Prior to the lawsuit, Hyundai voluntarily
offered owners a choice of several compensations including an extra
year of full warranty.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 RENAISSANCEHMMA is the most automated
automotive plant in the worldIn 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
suppliers have located throughout North 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
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
hoursSales 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
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 DaimlerChryslers 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.The 2004 Sonata is named the most
reliable automobile with only two problems per 100Mong-Koo's zero
defect mantra is succeeding and Consumer Reports rated the 2004
Sonata the most reliable car in America for 2004 with only 2
problems per 100 vehicles. Likewise, Hyundai rose to second place
in J.D. Power and Associates' 2004 survey of initial car quality,
tied with Honda and trailing only Toyota. In 1998, Hyundai ranked
among the worst in terms of initial defects. The comeback " is
astounding,"says Chance Parker, executive director at J.D. Power in
Westlake Village, California. " We really haven't documented that
level of turnaround in that period of time. They've adopted a
quality mentality they didn't have before." Former Hyundai Motor
America CEO Robert Cosmai confirms: " The change really started
with Hyundai Motor Company Chairman Mong Koo Chung. Quality is his
mantra. The Chairman is very happy and pleased with these
outstanding results, but he points out that this is just the first
step and that we are just getting started." Hyundai's R&D
budget has expanded 110% since 1999, to $1.6 billion for 2005. The
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.Joel Piaskowski, Chief
Designer and head of the California Design CenterHyundai invested
$200 million to open or expand research-and-design centers in
California, Michigan, and near Frankfurt, Germany. In January 2003
Hyundai and Kia's California design teams moved from Fountain
Valley to the new 90,000 square foot facility in Irvine. The center
employs about 100 designers, engineers, and model makers with the
task of designing vehicles for American tastes. Chief Designer Joel
Piaskowski was brought over to head the design center from Detroit.
The center houses advanced technology a visualization system from
Blue Water Technologies. The designers and math modelers utilize
the latest Alias/Silicon graphic workstations while clay modelers
sculpt new design and proposals on five-axis milling machines. In
January 2005, Hyundai opened a 4,300 acre $60 million proving
ground in California's Mojave Desert. It includes a 6.4 mile oval
track, 2 million square foot vehicle dynamics area, a 2.75 mile
winding track, a 3.3 mile section of hills and special road
surfaces, and 30,000 square feet of office space for about 50
staff. The track will be used for testing both Hyundai and Kia
automobiles.2005 Hyundai Tucson offering standard electronic
stability control, a first for a small SUV The U.S. 2006 Sonata
LXHyundai expanded the lineup in 2005 to include a small,
Elantra-based crossover SUV, the Tucson (project code JM). Even the
basic GL models include a long list of standard safety features
including head curtain airbags and electronic stability control.
Engine choices include the Beta II 2.0L inline 4 with CVVT (140
hp), Delta 2.7L V6 (173 hp), or in some markets, a 2.0L common rail
turbo diesel. AWD can be added for about $1,500 extra and features
a " torque on demand"system which runs in 2WD 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 new
aluminum Lambda 3.3L V6 with CVVT (235 hp). Some reports indicate a
hybrid Sonata may be sold in 2007.Fourth generation 2006
Azera/GrandeurThe third generation 2006 Accent sedan is more
refined and larger than previous generationsA fourth generation
Grandeur (project code TG) was also launched in 2005. In North
America it is known as the Azera. Built on a larger Sonata
platform, the Grandeur/Azera includes a larger 3.8L version of the
Lambda engine (263 hp). It has more interior room than the BMW
760i, Mercedes S Class, and Toyota Avalon. The front-wheel-drive
Azera rides on front double wishbones and a rear multilink
suspension, with 16 or 17"wheels. At 192.7 inches long, 72.6 inches
wide, and 58.7 inches tall, the Azera is 0.8 inches longer and
wider and 2.8 inches taller than the outgoing Grandeur. Safety
features are similar to Sonata with the addition of side airbags
for rear seat passengers. Luxury features include rain sensing
wipers, power rear sunshade, rear air vents, dual climate control,
electroluminescent dash and power adjustable pedals and
seats.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 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%.IN MEMORIAM, JU-YUNG CHUNGIt 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 receive an honorary degree in
business from George Washington University. He received many other
honorary 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. Ju-Yung Chung (1915 - 2001) is a Korean
national hero. To my way of thinking, there may be miracles in
religion but not in politics or economics... We succeeded because
our people devoted their enterprising spirits. They used the force
of their minds. Conviction creates indomitable efforts. This is the
key to miracles... Man's potential is limitless. Ju-Yung ChungIn
March of 2001, Ju-Yung Chung was admitted to Seoul's Asan Medical
Center. His 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
right0StampingIn 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.
WeldingThe 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.
PaintThe 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 protect themselves and the paints 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 AssemblyGeneral 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.
EngineHMMA 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 HMMAs 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.
QualityQuality 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 ControlIn the production control department, HMMA
manages whole supply chain activities and the network, begi