Hyundai I-10- WAGON R

8/7/2019 Hyundai I-10- WAGON R

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CHAPTER-1

INTRODUCTION

This project is made on the project title ³Comparative 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.

To create awareness about the Vehicle of Hyundai Company.

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



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CHAPTER-2

AUTOMOBILE SECTORE

Automobile FeaturesProduction 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 toother industry sectors has decreased significantly. Today the automobile industryrepresents less than 2% of the total European market capitalization, while 20 years agothe sector was almost double in relative size.Only about 1/4 of over 50 car manufacturers who were operating 40 years ago havebeen able to retain their Economic independence. Despite this consolidation,

overcapacity in the industry is a constant issue, keeping pricing and the return oninvested capital under pressure when the cost of capital can often not be covered. Ahigh fixed cost base ensures that companies follow a growth strategy. However, thisdoes not mean more jobs in the sector, but rather that fewer employees in lower-costcountries have to produce more.

As a result of tough competition, product cycles have become shorter which creates acrowded market place with newer and fresher products. This also means that 1) thecompetitive 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 launchingtheir 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 islikely 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 buyvery expensive automobiles, while on the other, demand for low-cost vehicles isincreasing. This trend can be expected to continue and car manufacturers have toensure 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 fuelconsumption, as well as emissions from internal combustion engines.The trend is moving towards developing drivetrains based on new technologies such ashybrids and fuel cells.Branding, technological leadership (especially in fuel efficient propulsion technologiesand safety) and consequently differentiation, as well as good supplier relations will bethe key success factors for the automobile company of the future.



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Deutsche Bank, Global Automotive Industry, The Drivers: How to navigate the autoindustry, 27 August 2004.This Euro if sector report has been compiled with research by SAM. It describes themajor 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 opportunitieshighlighted in this document, the car industry has achieved significant improvements interms 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

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Key Challenges

The ability of people and goods to move and to be moved in an efficient way is essentialfor 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 notsustainable. There will be a substantial negative impact not only on social andenvironmental values, but also on economic growth.2The automotive sector is a major source of CO2 emissions, representing approximatelyone quarter of global anthropogenic GHG emissions. In order to follow the Kyotoprotocol, several of the world¶s major automotive markets have adopted policies toreduce 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).3Thus, fuel economy and CO2 emission standards offer the best prospect for reducingvehicles¶ contribution to climate change. In the European Union, a dialogue between

regulators and the automotive industry trade association (ACEA) inspired a voluntarycommitment from the industry to reduce CO2emissions from passenger cars to a levelof 140 g CO2/km by 2008. Depending on progress, ACEA may extend the target to120g CO2/km by 2012.

According to the Clean Air for Europe (CAFE) programme the pollutants of mostconcern 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 ozonethat is formed by the reaction between hydrocarbon (HC) and nitrogen oxide (NOx).While the ACEA voluntary agreement (see key challenge ³Fuel Efficiency & ClimateChange´) targets the reduction of CO2 levels, Euro 4 and Euro 5 aim to regulate thevehicular 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 EuropeanCommission, 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. Thecommission is also considering proposing reductions in the emission limits for petrolcars (a 25% reduction in NOx as well as in hydrocarbons).



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In 2000, approximately 1.2 million people worldwide died as a result of road trafficinjuries, and another 7.8 million were seriously injured.5 In Europe, every year roadtraffic accidents kill more young people aged 5 to 29 than any other cause of death.6The 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 importantdeterminant for safety in road transport systems. They call for new road safety thinkingthat builds safety into the transport system, and improving implementation mechanismsand tools to achieve this.

Automobile companies are very large employers. Some major companies in Europehave 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 developmentof 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 increasingtechnical complexity of the product as well as with tougher safety and environmentalregulations. Additionally, marketing costs are likely to go up as the need for differentiation will persist. Pressure to make cost elements, like labour, more flexibleand to continuously restructure or even outsource part of operations is likely to increase.

As car manufacturers are becoming assemblers, instead of manufacturers, theintegration of suppliers into vehicle development and production is increasinglyessential 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 thesecriteria 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 temperatureincreases to no more than 2°C of pre-industrial levels.4 This means that GHGemissions 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 automotiveindustry of 140 g CO2/km by 2008.The tougher ACEA objectives will be substantially more difficult and costly to meet sinceit might require the hybridization of the drive train and more dramatic shifts in theproduct 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 willbe challenging.To meet current imposed carbon constraints, Original Equipment Manufacturers(OEMs) can turn to a wide range of carbon efficient measures, such as incrementaltechnologies, alternative fuels, hybrid vehicles, and, in the more distant future, fuel celltechnology. With rising oil prices, bio and synthetic fuels, which produce less GHGsthan petroleum fuels, are becoming a viable alternative to gasoline and diesel. Leaders



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in these areas will gain competitive advantage and brand differentiation in the industryin the coming years.Hybrid drive trains are likely to provide an interim solution, although they do notsignificantly reduce emissions when driving long distances. Hydrogen-relatedtechnologies 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 possibleto reduce all emissions through improved engine efficiency alone. While diesel engineshave advantages in terms of CO2 emissions compared to its petrol counterparts, theyproduce 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 sophisticatedtechnology. The average cost of compliance for Euro 5 is estimated by the VDA (Verband Detacher Automobilhersteller) at ¼800 per vehicle. Volkswagen puts the additionalcosts required at roughly ¼1 000 per vehicle. This is comparable to the higher materialcosts experienced in 2005 in terms of magnitude.

Some auto sector analysts, however, consider these costs to have been overestimatedby the automobile lobby, and quote much more manageable figures closer to ¼140 per vehicle.Companies that have market-ready, new technologies enabling compliance withtougher standards should be able to improve their short-term competitiveness.In the developed and developing worlds, strategies should aim at achieving significantreductions of road traffic injuries from current levels and curbing the growth rate indeaths and injuries. Either through regulation or by market forces, car manufacturersare already facing pressure to make cars less dangerous, not only for the drivers andoccupants 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 regulationscreating more space between the front grill and the so-called hard points (such as theengine) to absorb the energy from a collision ; 2) redesigning the car¶s hood to make it abetter 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, adaptivelighting, active braking systems and run-flat tires to prevent accidents.The automobile industry has one of the highest numbers of temporary workers as apercentage of the total workforce of any sector (often 10% of the workforce in a givenyear but representing up to 30% during peak production periods).8 Temporary workmight in some cases be less stable and as such, this category of employee cannotafford to alienate automobile manufacturers and their subcontractors, which are oftenthe sole local employers. The abusive use of temporary employment is now taken moreinto account by industrial tribunals, which do not hesitate to rule against companies thatoverstep the mark and impose fines.The high number of temporary workers at automaker companies may also affect thequality and production of cars due to increased turnover of employees and lack of skillstransfer.To attract well qualified employees and maintain a high level of motivation, automobilemanufacturers should offer a positive and safe working environment including: efficient



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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 aspossible. 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 andstate of the art technology. The car manufacturer has to make sure that the suppliersmanage 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 CM YK

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 likeglobalisation, 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 Indiait 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 estimated300 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 percentgrowth in the last six quarters is anything to go by.

Thanks to the unshackling of Indian entrepreneurship,the country has seen anaverage 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 Prizewinners 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



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Manufacturers Organization (OICA) and R Seshasayee, Vicepresident,CII and ManagingDirector, Ashok Leyland. _ CMYKAudi AG has taken a step forward and launched the A4 sedan in the country today. A MercedesC-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, MichaelWeber said that the A4 offers a refreshing alternative for drivers who will not compromise on

performance and quality and want something differentfrom 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 awhopping 344 horsepower from a4.2-litre V8 engine. The former twowill be available with six-

speed multitronictransmissions 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 PresidentYC 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 ancillaryand component manufacturers, Auto Enterprise 2006 is spread over 5500 sq mts. More than 250

exhibitors epresenting a wide range of auto products, including automobile componentsand 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 Indianenterprises 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 thecomponent manufacturers have been in the medium

sector for which there is no official definition so far and may involveMore than Rs.10 million investments in plant and machinery.

Five to seven percent of the companies are from the upper SMEsegment in Auto Enterprise 2006.Most of the companies in the event

directly or indirectly derive over.250 exhibitors at Auto Enterprise



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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 compromiseOn 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 mainstayof 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 transmissionsfor the moment while no word was saidabout the latter.

Besides powerful engines, Audi will also offer a vast range of technologicalgizmos to suit the up market buyer. Features such as ESP or Electronic Stability Program,

permanent four wheel drive Audi drives in A4 range intoIndian market Michael Weber, country manager, Audi at the A4 launch.continued on page 11 _ Commerce & Industry Minister Kamal Nath with CII PresidentYC 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 Enterprise2006 is spread over 5500 sq mts. More than 250 exhibitors representinga wide range of auto products, including automobile components

and accessories, Safety & Garage Equipment, Testing & Pollution Control Equipment spiced upthe event. The main product

lines come from Mechanical Spare parts - forged, blanked and cast, plastic injection mouldingitems and auto electrical products.

The show provides a unique opportunity to the small Indian



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enterprises to showcase their quality and technological capabilitiesand 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 mediumsector for which there is no official definition so far and may involvemore than Rs.10 million investments in plant and machinery.

Five to seven percent of the companies are from the upper SMEsegment in Auto Enterprise 2006.

Hyundai Group

Address:140-142, kye-dong, Chongno-guSeoul 110-793South Korea

Telephone: (02) 746-1114Fax: (02) 741-2341http://www.hyundaicorp.com

Statistics:Public Company

Incorporated: 1947 as Hyundai Engineering & Construction CompanyEmployees: 359Sales: $75 billion (Hyundai Group 2000); $20.4 billion (Hyundai Corp. 2001)Stock Exchanges: KoreaTicker Symbol: 11760NAIC: 423390 Other Construction Material Merchant Wholesalers; 423510 Metals Service Centers andOther Metal Merchant Wholesalers; 423620 Electrical and Electronic Appliance, Television, and RadioSet Merchant Wholesalers; 423810 Construction and Mining (Except Petroleum) Machinery andEquipment Merchant Wholesalers; 423820 Farm and Garden Machinery and Equipment MerchantWholesalers; 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 ofbusiness 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 inThailand.1967: The Hyundai Motor Company is formed.2001: The Hyundai Group conglomerate continues to bedismantled.



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CHAPTER-3

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±focusedapproach to management. We promise you that Hyundai will always take bold and confident

steps for our customers worldwide.



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The Hyundai Group spent most of its history operating as one of South Korea's largest chaebols, orconglomerates. The group displayed spectacular growth since its founding in 1947 and its rapidexpansion--to a point where its interests included car manufacturing, construction, shipbuilding,electronics, and financial services--reflected the achievements attained during South Korea's economicmiracle. The South Korean economy took a turn for the worse during the late 1990s, however, whichprompted President Kim Dae Jung to launch a series of reforms aimed at dismantled large, oftencorrupt, chaebols. By 2001, much of the Hyundai Group had been dismantled. Roh Moo Hyun, electedPresident in 2002, continues to reform the South Korean business sector.

Hyundai's growth was linked inextricably to South Korea's reconstruction programs following World WarII and the Korean War as well as to the state-led capitalism that resulted in a polarization of thecountry's corporate structure and the domination of the economy by a number of conglomerates. WorldWar II left the country devastated, and the small recovery Korea had been able to make following thisconflict was reversed during the Korean War, which lasted from 1950 to 1953. The chaebols, which aresimilar to Japan's zaibatsu, worked with the government in rebuilding the economy and formed anintegral 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 notedthose areas of industry that the government had selected as crucial to economic development andstructured the group accordingly.

Explosive Postwar Growth

The foundation of Hyundai was laid before the Korean War, in 1947, when Chung set up HyundaiEngineering & Construction Company. The company was involved in the early stages of the country'srecovery following World War II. After the Korean conflict, development intensified, and Hyundai wasquick to take on a key role, working on civil and industrial projects as well as housing programs. In1958, it set up Keumkang Company to make construction materials; four years later, when the first ofKorea's five-year development plans was launched, Hyundai was well placed to win a range ofinfrastructure 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 theeconomy's momentum increased. In 1964, it completed the Danyang Cement plant, which in 1990produced well over one million tons of cement. In 1965, the company undertook its first overseasventure 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 andthus sowing the seed for what was to become the country's leading domestic car manufacturer. Initiallythe company assembled Ford Cortina cars and Ford trucks. Two years later, Hyundai took another stepabroad 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 sectorby 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 chemicalindustries. Oil and steel were both targeted. The planners then turned their attention to theconsumption 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 forthese industries were to be of great significance both to Hyundai and the nation as a whole, and the1970s proved to be a period of rapid development.



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Expansion into Shipbuilding: Early 1970s

Hyundai's entry into shipbuilding would eventually take Korea's shipbuilding industry to second positionin the world, behind Japan. In 1971, Chung decided to begin shipbuilding, and by the following year thecompany's shipyard had held its ground-breaking ceremony in Mipo Bay, Ulsan, on the southeastern tipof 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 UnitedKingdom. 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 theconsequent decline in demand for large tankers. Hyundai, however, quickly won four orders for largetankers from the Japanese, its main competitors, and concluded technical cooperation deals withKawasaki Heavy Industries of Japan and Scott Lithgow of the United Kingdom. Before the marketcollapsed, 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 toremain 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 andB&W.

A further collaboration was clinched in 1977 with Siemens, of West Germany, which led to the creationof the electrical-engineering division. In the following year the company changed its name to HyundaiHeavy Industries Company (HHI) to reflect its diverse operations. At the same time it incorporated itsengine and electrical engineering divisions into Hyundai Engine and Machinery Company and HyundaiElectrical 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 thegroup began constructing an integrated car factory adjacent to its heavy-industry complex at Ulsan. Itwas to be the foundation of Korea's largest auto company, one that was to dominate Korea's home andexport markets. By the late 1980s, UBS Phillips and Drew Global Research Group ranked Hyundai 13thin the world auto industry, with the production of 819,000 vehicles and 1.9 percent of the world retailmarket.

The aim of this ambitious project was to move away from car assembly only and to produce, withgovernment 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 groupsas well. George Turnbull, a former managing director of British Leyland, who was then vice-presidentof Hyundai Motors, was in charge of the project. The car was styled by the well-known Italian designerGiorgetto Giugiaro, was powered by a Mitsubishi Motor engine, and used U.K. components. The projectwas 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 by1979 the total had risen to 110,000. Although Hyundai could sell every vehicle it produced in theprotected home market, it soon sought to attack export markets by reserving approximately one-fifth





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Institute, a year later. Work continued on developing products such as the new generation of very largecrude 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 marketin 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 thecompetitive edge it had over its Japanese rivals. HHI also became embroiled in a legal wrangle with SirYue-Kong Pao's World-Wide Shipping Group in 1988. The dispute was over an order for very large crudecarriers, 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 in1988 HHI was to record its first-ever loss, that of W29 billion on sales that declined slightly to W945billion; 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 Norwegianshipping 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, thegovernment took steps to protect the industry, which had by then made large investments in plants andequipment. 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 in1986 following the recovery of the market, and Hyundai was able to resume manufacture of lightcommercial vehicles.

By the middle of the decade, Hyundai had taken Canada by storm. Its Pony subcompact vehicle becameCanada'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 firstnine months of 1985, topping those of Honda and Nissan combined. Total production in 1985 had risento 450,000.

In 1985, the company announced plans to build a car assembly plant at Bromont, near Montreal, and atthe 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 carsexported in that year, 168,000 were sold in the United States, where sales were to increase to 263,000the following year. Hyundai's initial success in the United States, though, faded before the end of thedecade when sales began to flag. Problems in the company's key overseas market were attributed tothe lack of new models, increasing competition in the weakened U.S. car market, and the severestrikes 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 late1988; initial sales, though, proved disappointing. A year later, this car was being manufactured at theBromont plant, following the opening of the factory in 1989. In the same year, Hyundai signed a dealwith 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 itheld a 15 percent stake.

Hyundai planned to increase production at the Canadian plant to 100,000 by the time the Chrysler dealcame into effect. Export sales, which were also hit by the appreciation of the won and thedepreciation of the yen, remained sluggish. Increased wage costs also affected the group but had theadvantage of boosting domestic sales that, for the industry as a whole, increased 50 percent to 356,000units in 1989.



15

Hyundai in the Early 1990s

The group became intent on reducing its dependence on the U.S. markets. By 1990, the domesticmarket was proving increasingly important to the essentially export-oriented group. Both the car andconstruction markets were enjoying strong demand at the end of the decade. This situation helpedHyundai 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 abroad range of plant construction, including Korea's first nuclear power plant. Meanwhile exports in theshipbuilding sector were showing a marked improvement.

Following the creation in 1983 of Hyundai Electronics, Hyundai stepped up its presence in theelectronics field and produced semiconductors, telecommunication equipment, and industrialelectronic systems. The company, which focused on industrial markets, sought to increase its presencein consumer electronics, despite formidable competition from domestic companies such as Samsungand Goldstar.

The group as a whole had proved itself capable of taking diverse markets by storm and was determinedto maintain and expand its markets by stepping up research-and-development spending. However, thecountry'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, andincreasing competition in the all-important overseas markets.

Faced with this changing political scene and a less favorable international rate of exchange, Hyundaishifted gears in the early 1990s. In automaking, its largest enterprise, it worked to regain lost ground inthe United States, where demand for its low-priced Excel and somewhat higher-priced Sonata modelsslumped in the wake of widespread consumer complaints and a depressed entry-level market. Hyundai'snew Elantra sedan, selling for $9,000, was to be its lead item in the U.S. market. The group's chairmanat 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 Groupwas 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 newpolitical party early in 1992 with a view to promoting open-market policies. Chung's UnificationNational Party (UNP) promptly won 10 percent of National Assembly seats; Chung himself then retiredfrom 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 severegovernment pressures after Chung formed his party. Regulators charged illegal political contributionsby one Hyundai company and accused others of tax evasion. In addition, Hyundai's ability to finance itsoperations was threatened by other government actions. In return, Hyundai, at this time headed byChung Se Yung, threatened to withhold huge investments planned for the coming year. In 1993, havingfinished third in South Korea's presidential election, Chung Ju Yung reportedly said that he wouldresume chairmanship of the Hyundai Group and would reorganize the corporation into manyspecialized, independently run companies. In 1995, his second-eldest son, Chung Mong Koo, was namedchairman of the group while Chung remained honorary chairman.

In auto and personal-computer sales, Hyundai companies moved aggressively. In mid-1992, Hyundai'snew 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-yearservice warranties that covered even windshield wiper blades. By early 1993, Hyundai was offering thefirst auto engine it had designed and made itself, as opposed to the Japanese-made Mitsubishi enginesthat were used in its earlier models. More than ever committed to the smaller vehicle, Hyundai wasselling autos in more than 100 countries.



16

In personal computers, Hyundai in mid-1992 took a drastic step when it moved its entire electronicsoperation to the United States, the world's largest computer market. Hyundai Information Systems hadalready entered the direct personal-computer market, cutting prices and offering toll-free telephonesupport 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 wasmainly proximity to the market, which meant lessened inventory requirements. These developmentsshowed the Hyundai Group to have the same innovative and energetic approach that had characterizedits earlier ventures.

The Dismantling of Hyundai

The latter years of the 1990s brought with them economic turmoil for South Korea. In order to restorethe nation's financial health, President Kim Dae Jung, who took office in 1998, launched a series ofrestructuring 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 theregion's large conglomerates. By this time, the Hyundai Group was responsible for approximately 20percent of Korea's GDP. As such, its financial health was directly related to South Korea's overalleconomic condition.

As a result of government pressures, Hyundai and other South Korean chaebols, including the DaewooGroup, set plans in motion to sell off many of their businesses in order to pay down debt and shore upprofits. Hyundai's concentration remained on autos, electronics, heavy industry, construction, andfinance. Even as the group struggled under its debt load, it strengthened its holdings with the purchaseof Kia Motors Co. Ltd. and LG Semiconductor.

Despite the government's involvement, Hyundai was slow to comply with restructuring demands. Itsquestionable accounting practices often made it the target of negative publicity. Rivalries betweenmembers of the founder's family also led to bad press, leaving many investors anxious about the futureof the group and its member companies. Indeed, many Hyundai affiliates, including HyundaiEngineering & Construction and Hyundai Electronics, were nearing bankruptcy as debt continued tospiral 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 concernofficially separated from the Hyundai Group in September 2000, signaling the start of sweeping changesthat led to the eventual dismantling of what was once South Korea's largest conglomerate. In August2001, nine core Hyundai companies, including Hyundai Engineering & Construction and HynixSemiconductor Inc. (formerly known as Hyundai Electronics Industries), left the chaebol. Theseparation cut Hyundai Group's assets to just $20.8 billion and left it in control of 18 membercompanies. 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 globalforce in the technology sector. By 2003, foreign investors owned over a third of the shares ofcompanies listed on Seoul's stock exchange. During 2002, Roh Moo Hyun was elected president of SouthKorea. Feeling the pressure from foreign investors, he maintained that harsh reform would continuewithin 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 companiesbearing the Hyundai name.

Principal Competitors: LG Group; Samsung Group; SK Group.



17

H YUNDAI MOTOR COMPANY HISTORY: A MODERN RENAISSANCE

H YUNDAI FOUNDER, JU-YUNG CHUNG

The beginning of Hyundai Motor Company

dates to April 1946 when founder, Ju-YungChung established Hyundai Auto Service inSeoul, South Korea at the age of 31 years.The name Hyundai was chosen for itsmeaning which in English translates to³modern.´ The Hyundai logo is symbolic of thecompany's desire to expand. The oval shaperepresents the company's global expansionand 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 brother Se-YungChung in December 1967. In 1968 thecompany entered into a contract with Fordmotor company to assemble the Ford Cortinaand 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 shortestgroundbreaking to first commercial production of any of Ford¶s 118 plants. The eight year

journey provided Hyundai with assembly knowledge, blueprints, technical specifications,production manuals, and trained Hyundai engineers.

Hyundai founder , Ju-Yung Chung



18

THE FORMATIVE YEARS

To stimulate economic growth, the South Koreangovernment formulated a detailed plan for thedevelopment and manufacture of Korean cars by 1975.

Four Korean companies: Hyundai, Daewoo, Kia, andSSangyong accepted the challenge. Hyundai submittinga plan for a new plant with a capacity of 80,000 Koreandesigned cars to be produced each year. Hyundaiapproached 26 firms in five countries to acquire theadditional technologies required.

y 10 firms in Japan and Italy for car designy 4 firms in Japan and the United States for

stamping equipmenty 5 firms in the United Kingdom and Germany for

casting and forging equipment

y 2 firms in Japan and the United Kingdom for enginesy 5 firms in the United States and United Kingdom

for automotive parts

Giorgetto Giugiaro's ItalDesign firm was hired for stylingand design while Mitsubishi was selected for engine,transmission, rear axle, and casting technology. Hyundaicontracted with former British Leyland Motor Corppresident, George Turnbull and six other British technicalexperts to serve for a three year period for the

development of Hyundai's first indigenous model, thePony.

Production began in 1975 and the Pony was officiallyreleased in 1976. After the contract with the Britishexperts ended in 1977, Hyundai hired moonlighting Japanese engineers to solve remainingissues. With the eventual goal to export automobiles to the United States, Hyundai releasedthe Pony for testing, certification, and approval in Europe. Exports of the Pony soonfollowed and the Pony subcompact was displayed at the 1978, 56th International AutomobileExpo in Brussels. That same year, Hyundai exported their 10,000th Pony.

The new Ulsan Hyundai plant justprior to opening in 1975 is already

producing the Pony

Fuel tank inversion testing atMIRA in the U.K. circa 1977

Work begins on the design of Pony 2 with this wood model



19

Working toward export approval in Europeand eventually the U.S., Hyundai participatedin the 56th International Automobile Expo in

Brussels

This 1978 photo commemorates the 10,000thPony export. These are bound for Chile.

1975 Hyundai Pony

1977 Hyundai Pony Wagon

1987 Pony II Pickup with a hemi engine

Hyundai made the most of the Pony design as it wasavailable in several configurations. A Pony pickupwas introduced in May 1976, a station wagon in April1977, and a three door hatchback in March 1980. Arefreshed Pony II was released in January 1982 in achoice of five door hatchback or pickup. Both thePony and Pony II offered three Mitsubishi engine

choices including a 1.2L, 1.4L (70 hp), and a 1.6L (74hp). These engines were SOHC hemispherical withtwo vales per cylinder. Starting in 1985 the HD badging was replaced with Hyundai spelledout and air conditioning was offered with the 1.6L engine. It is interesting to note that a 1.6LGT package included a leather-wrapped Momo steering wheel, tachometer, fog lights, andunique badging. While Hyundai only expected to export 5,000 Pony IIs to Canada in 1984,over 50,000 were sold.

1985Hyundai Pony 2



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For the next few years, Hyundai applied theknowledge gained from the Pony and set to work ontwo new projects. One was a subcompact Ponyreplacement that would come to be known as theExcel. The other was a compact sedan to replace the

Ford Cortina and would be badged the Stellar. The1983 Stellar made use of the rear wheel drive Cortinachassis, but wore a body designed by GiorgettoGiugiaro. Many luxury options were offered such aspower windows, locks, and mirrors, remote fuel door and trunk, and air conditioning. Likewise severalengine 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. Theoriginal Stellar's double wishbone suspension waschanged to a MacPherson strut design. Emission

restrictions prevented the Stellar from reaching theUnited States, but it was exported to Canada andother countries.

The 1985 Excel (also known as the Pony, Presto, anda similar Mitsubishi Precis) was Hyundai's first frontwheel drive automobile and was produced until 1994.With the Excel, Hyundai finally earned their muchsought approval to enter the United States automotivemarket in 1985. The Excel was offered in twoformats: 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 astaggering 126,000 vehicles that year, more than any other import. A facelifted secondgeneration 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, providingHyundai with approval to enter the US

1986 U.S. Excel Hatchback advertisement(click for a larger version)

1983 Hyundai Stellar

1986 Canadian specHyundai Stellar

1989 Hyundai Excel



21

market.

This 1986 photograph showsExcels beingloaded for the first export to the UnitedStates. 1,050 Excels are queued for the

journey.

1986 U.S. Excel sedanadvertisement (click for a

larger version)

1992 second generationExcel (click for a larger

version)

1986 Hyundai Grandeur / Mitsubishi Debonair was a Hyundai/Mitsu joint venture



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RAPID EXPANSION AND GROWING INDEPENDENCE

In 1986 for the follow-on to the Ford Granadasedan, Hyundai rebadged the Mitsubishi

Debonair as the Hyundai Grandeur. The firstgeneration Grandeur was offered until 1992when Hyundai partnered with Mitsubishi todevelop the next generation (which became thethird generation Mitsubishi Debonair). Hyundaidesigned the body and trim while Mitsubishiwas tasked with the powertrain.

The success of Excel led to plant expansions at home and abroad. Design on a new Koreanplant 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 Ulsanplant grew to cover over 4.8 million square meters making it the largest automotive plant inthe 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 optimumadvantage. This included electronics, robotics, steel stamping, and even Hyundai's massiveshipyards.

Asan, Hyundai's third plant in the process of construction in August 1989.

Hyundai's first in-house design, the 1989 Sonata included a Mitsubishi licensed

engine but with Hyundai's own multipoint fuel injection



23

As Hyundai'sengineers gainmoreexperience,they continue

to implementmore of their own technologyandrefinement.This work andthe new Asanplant culminatein Hyundai'sfirst entireautomobile

using their design andtechnology: thefirst generation,1989 Sonata.Designed withthe North

American market in mind, the first generation Sonata was styled by Giorgetto Giugiaro'sItalDesign firm. Some were manufactured in Korea and some in the Quebec plant. MultipleSirius engine choices (including SOHC and DOHC options) were offered for variousmarkets. 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 V6was 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 codeSLC). The Scoupe sold relatively well and was notable as being the first use of Hyundai'sadvanced in-house designed, Alpha engine. Available in both naturally aspirated andturbocharged versions, the Alpha was the first engine designed in Korea. The original 1.5liter SOHC engine was later made in a smaller 1.3 liter version. The Alpha was later used inthe 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 Elantracompact sedan in 1991 (project code J1). The Elantra is also known as the Avante (2ndgeneration) and Lantra. The name Lantra arose because Mitsubishi briefly complained thatElantra was too similar to their Elante trim level. Lotus also complained of the similarity tothe Elan moniker. Note: the Elantra survived longer than the Elante or Elan and Elantrabecame the official name worldwide in 2001. The Elantra was powered by the 1.6L inline 4cylinder Beta engine featuring a cast iron block and aluminum DOHC cylinder heads, MFIfuel injection, 4 valves per cylinder, and forged steel connecting rods. It produced about 114

Hyundai Scoupe included the first engine designed inKorea.

1991 Elantra was powered by the 1.6L DOHC Beta engine



24

hp at 6,000 rpm. The top speed was 116 mph and it made 22 mpg/city.

The second generation Sonata was introduced in 1993(project code Y2) featuring a more modern shapereminiscent of the Mazda 626 and Honda Accord. Engine

choices included a 2.0L inline 4 and an optional SOHCSigma 3.0L V6 producing about 150 hp. This Sonata wasoriginally produced in both South Korea and Canada butmostly due to falling sales, the Bromont, Quebec plant wasshuttered in 1994.

A second generation Elantra debuted in 1995 (project codeRD) in sedan and station wagon styles. Engine choicesincluded the 1.6 and 2.0L Beta as well as a 2.0Lturbodiesel (not in the U.S.). The Elantra was facelifted in1998.

The Accent subcompact was introduced in 1995 (projectcode X3) to replace the Excel. It is also known as thePony, Excel, Verna, and Brisa. The Accent was extremelypopular in Australia and is still rated as one of the mostpopular imports of all time. In 1998 it achieved a 5.5% share of the Australian market. Asecond generation, larger Accent was introduced in 2000. Several Alpha engine choiceswere 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 ver y popular export

Second generation 1993 Sonata

The second generationElantrawas sold brief ly as a wagon



25

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 onlyoffered in a few markets but was produced until about 2003 and offered a choice of theSigma 3.0 and 3.5L V6 producing 205 and 225 hp respectively. The Sigma has a cast ironblock and aluminum DOHC cylinder heads with MFI fuel injection, 4 valves per cylinder, andforged steel connecting rods. Note: this engine also powers the 2001 Kia Sedona minivan,Santa Fe, XG350, Kia Amanti, and Kia Sorento.

After a short break following the end of Scoupe production, Hyundai introduced anew coupe in 1996, the Tiburon (project

code RC). In various markets, it is alsoknown as the Coupe, Turbulence, andTuscani. It was initially offered with achoice of a 1.6 or 1.8L Beta engine with114 or 129 hp respectively. The Tiburonwas first introduced to the United States in1997 with a 1.8 or 2.0L Beta engine. The2.0L produced 135 hp. A redesign in 1999offered a newer 2.0L Beta engine. After a one year break, the 1996 Tiburon replaced

the Scoupe.



26

Sonata's third generation release in 1996(project code Y3) reintroduced Europeandesign elements with a more upmarketlook. As with the previous generation aninline four was offered as well as the 3.0

liter Sigma V6. However, it was the fourthgeneration released in 1998 (1999 in theUnited States) that the Sonata began totake off in North America. The Europeanstyling influence remained, and the designwas acknowledged by members of thepress as attractive and original. Four engine choices were offered including1.8L, 2.0L, 2.4L, and an impressive Delta2.5L V6 producing about 170 hp. Thisintroduction coincided with the 10 year,

100,000 mile warranty in the UnitedStates.

A subcompact economy car, the Hyundai Atos was introduced in 1997. It is alsoknown by the names Atos Prime, Amica,Dodge Atos, Santro, and Kia Vista. Asecond generation version was introducedin 2003.

ASIAN FINANCIAL CRISIS

Asian financial markets and companies faced a difficultperiod at the end of the 20th century. Some smartcompanies like Hyundai made the best of a very difficultsituation. It was during this time that Hyundai reducedits workforce and sold a number of assets. Kia Motorswas faltering and did not have the resources needed tocontinue. In 1998 Hyundai Automotive purchased asignificant amount of Kia anticipating the synergy of the

combined competitors.

Hyundai's largest and luxurious sedan was introduced in1999 as the Equus and is sometimes called theCentennial. It was based upon the front wheel driveMitsubishi Proudia. A redesign is due in 2006 with rear wheel drive and an optional V8engine. A version is expected to be released in the United States to gauge public reaction toa luxury Hyundai line.

The third generation 1996 Sonata incorporatedmore European design elements

Fourth generation 1999 Sonata



27

In his drive to build the world's largest car and truck company, DaimlerChrysler Chief Executive Jürgen Schrempp purchased a 10.5% stake in Hyundai Motor in June 2000 withthe plan to build small cars and 100,000 trucks a year in a 50-50 joint venture.

The Elantra appeared in its third generation

in 2000 (project code XD). The wagon wasno longer available and was replaced with a 5door hatchback. While it bares a compactexterior, the EPA classified it as a midsizebecause of the generous room inside. The1.6 and 2.0L Beta engines provided goodpower and fuel economy rated at 27 mpg cityand 34 mpg highway. In 2002 an updatedElantra GT featuring leather seating and asharply styled back was release. The Beta IIengine 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 theXG300 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. TheSigma featured a cast iron block, aluminum DOHC cylinder heads, MFI fuel injection, 4valves per cylinder, and forged steel connecting rods. It is interesting to note that this isperhaps the only time that Hyundai's internal project code (XG) was publicly used in thename of a vehicle. The United States XG350 received a facelift in 2003.

Hyundai introduced a third generationXG300 / Grandeur in 2001 sansMitsubishi

The facelifted 2002 Elantra GT featured sportier handling and leather seating



28

CATAL YST FOR CHANGE, MONG-KOO CHUNG

The leader of the Hyundai-Kia Automotive Group waschanged by founder, Ju-Yung Chung in 1999 after the Asian

financial crisis and government mandated breakup of theHyundai Group. Previously the automotive group was beingmanaged by the founder's brother. His son, Mong-KooChung had performed well managing Hyundai's after-saleservice and dealerships. Mong-Koo was the catalyst of anextreme turnaround for the company. During the 80s and90s, his uncle focused on Hyundai Automotive's growth andproducing as many cars as possible. Product quality andcustomer satisfaction suffered. From his experience workingwith dealerships and angry Hyundai customers, Mong-Kooknew 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 Koreancompanies, was ultra-hierarchical and slow to change. Managers rarely cooperated withone another and division chiefs ran their operations as personal fiefdoms. "When a problemoccurred, each division would blame other divisions," says Lee Hyun Soon, Korean head of R&D.

Mong-Koo's first step was to replace membersof 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 bestautomotive companies followed. He also sentteams to America to study weather, roadconditions, and driver habits. Quality controlstaff increased tenfold to 1,000 and theyreported directly to him. Employees wereencouraged and rewarded to offer suggestions. One example that is told is that aworker reported the Sonata and XG350

sedans had differently shaped spare tirecovers. Sharing the cover saved Hyundaiabout $100,000 per year.

There are reports that the Korean government requested that Mong-Koo step down asHyundai 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.

Father and son: Ju-Yung andMong-Koo Chung in 2000

Hyundai Chairman, Mong-Koo Chung



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Mong-Koo Chung has earned a reputation for an obsession with quality. The new Sonata'slaunch 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 thesize of the gap between two pieces of sheet metal near the headlight. The problem was notvisible 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.

Hyundai entered the crossover,sport utility market in 2001 withthe Santa Fe (project codeSM). In addition to being a bighit for the company, it was aturning point and major milestone of the company'srestructuring. Initially the SantaFe was offered with a choice of

two engines: a fuel efficient butunderpowered Sirius 2.4L (138hp) or the Delta 2.7L V6 (about170 hp). Note: the initialintroduction of the 2.7L Deltacontained a flaw which Hyundaicorrected for owners and solvedin future versions of the Deltaengine. Outside of the US, a 2.0L common rail turbo diesel (CRTD) was available.Reflecting Hyundai's new leadership, Hyundai listened to suggestions from customersaround 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 weremade in the 2003 model including gas strut hood lifts, sunroof, illuminated glovebox, and theSigma 3.5L V6 engine with 200 hp. Hyundai continued to make customer requestedimprovements 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 mentionthe manual transmission has the best feeling shifter yet. Fuel economy for the variousconventional engines is in the high 40s with over 60mpg for the diesel.

The Sonata based Santa Fe crossover entered the market in2001



30

In keeping with Hyundai's renewed focus oncustomer satisfaction, the Sonata likewisereceived a dramatic facelift in 2001 (2002 in theU.S.). The exterior took on a much moreEuropean look reminiscent of the third

generation but with hints of Mercedes andJaguar. The interior was restyled and the seatsreplaced with the more substantial seats usedin the XG. The drivetrain was updated andimproved to include the Delta 2.7L V6 andShiftronic manually shiftable automatictransmission. The redesign was well receivedwith sales increasing to higher record levelswith each passing year. However, Hyundai didsettle a class-action lawsuit over publishedhorsepower numbers on the Sonata, Santa Fe,

and to a lesser degree Elantra. Prior to thelawsuit, Hyundai voluntarily offered owners achoice of several compensations including anextra year of full warranty.

A brand new second generation Tiburonappeared in 2003 (project code GK). Almost allof the press was favorable and praised thestyle and handling of the car. Numerousautomotive writers compared the new car'slines to the famous Ferrari 456GT. Though

acceptable, power for this sports coupe wasnot Ferrari like and featured the Delta 2.7L V6with about 172 hp.

Introduced in 2002, the Hyundai Terracanoffers a CRTD or Sigma 3.5L V6 engine. Thisserious SUV sports a Borg Warner, shift on thefly transfer that can engage 4WD at up to100km/hour, and a limited slip differential at therear 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 inGenghis Khan.

Plans are underway to bring an SUV larger than the forthcoming Santa Fe to the U.S. Itwould 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 experiencebuilding their own versions of the Mitsubishi Pajeros as the Hyundai Galloper for the SouthKorean market.

2002 Sonata makeover included moreEuropean styling cues than ever before

Sonata-based Tiburon is favorably comparedto a famous Ferrari design

2003 Hyundai Terracan includes seriousoffroad ability and luxur y features like Xenon

healights



31

A MODERN RENAISSANCE

In 2002 Hyundai initiated its plan to open amanufacturing plant in the United States.Eventually 1,744 acres of pasture in

Montgomery, Alabama was selected for thefuture plant. The grand opening of the $1.1billion plant occurred on May 20, 2005 andwas attended by thousands including Alabamagovernor Bob Riley, former President GeorgeBush, and Chairman Mong-Koo Chung. Whilethe plant employs over 2,000 workers, more than 72 suppliers have located throughoutNorth 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, vehicleassembly shop, two-mile test track, and an engine shop. In May 2005, the facility markedthe official start of production with its first saleable 2006 Sonata. Hyundai Motor

Manufacturing Alabama (HMMA) will produce 300,000 vehicles per year at full capacityincluding the Sonata and Santa Fe. Using robotics, assembly methods, and a teamstructure 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 aframe, and painting the chassis are all done with over 300 robots that move materials frombeginning 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 areemployed 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 productioncapacity 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 afive-minute shower in a water test booth to check for leaks and paint blemishes.

This photo captures guests arriving for the grand opening f lying over HMMA prior to the grandopening ceremony.

HMMA is the most automated automotive plantin the wor ld



32

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 theexception of a temporary slowdown in sales in the home Korean market, Hyundai sales arebooming around the globe. Sales increased 21% in Europe for 2004 and Hyundai held a17% 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 jointventure 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 boostproduction and sales by about 30 percent in 2006 to 300,000 units. Targets call for Chinaproduction capacity of 600,000 units by 2008. Hyundai is the number one brand in thegrowing Russian economy. Sales there increased 72.5 percent in 2005 representing 87,457automobiles. 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 toLehman Bros. Even Toyota vice chairman Fujio acknowledged the company that is growingin 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 ³realignthe alliance in order to reflect more realistically current market conditions." Under theagreement, 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 anearlier agreement for jointly making trucks. The deal started unraveling in September 2003when DaimlerChrysler announced an alliance with Beijing Automotive to produce Mercedes-Benz sedans in the fast-growing Chinese market. Hyundai already had formed an exclusivepartnership with Beijing Automotive a year earlier to manufacture sedans in China.



33

Mong-Koo's zero defect mantra is succeeding andConsumer Reports rated the 2004 Sonata the most reliablecar in America for 2004 with only 2 problems per 100vehicles. 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, Hyundairanked among the worst in terms of initial defects. Thecomeback "is astounding," says Chance Parker, executivedirector at J.D. Power in Westlake Village, California. "Wereally haven't documented that level of turnaround in thatperiod of time. They've adopted a quality mentality theydidn't have before." Former Hyundai Motor America CEORobert Cosmai confirms: "The change really started withHyundai Motor Company Chairman Mong Koo Chung.Quality is his mantra. The Chairman is very happy andpleased 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 SouthKorean R&D headquarters has expanded considerably and now features a threedimensional cinema for viewing virtual models of new cars. In each year since 2002,Hyundai has filed a record number of patents for new technologies.

Hyundai invested $200 million to open or expand research-and-design centers in California, Michigan, and near Frankfurt, Germany. In January 2003 Hyundai and Kia'sCalifornia 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 makerswith the task of designing vehicles for American tastes.Chief Designer Joel Piaskowski was brought over to headthe design center from Detroit. The center housesadvanced technology a visualization system from BlueWater Technologies. The designers and math modelersutilize the latest Alias/Silicon graphic workstations while claymodelers 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 30,000square feet of office space for about 50 staff. The track will be used for testing both Hyundaiand Kia automobiles.

The 2004 Sonata is named themost reliable automobile with

only two problems per 100

Joel Piaskowski, Chief Designer and head of the California

Design Center



34

Hyundai expanded the lineup in 2005 toinclude a small, Elantra-based crossover SUV, the Tucson (project code JM). Eventhe basic GL models include a long list of standard safety features including head

curtain airbags and electronic stabilitycontrol. Engine choices include the Beta II2.0L inline 4 with CVVT (140 hp), Delta2.7L V6 (173 hp), or in some markets, a2.0L common rail turbo diesel. AWD canbe added for about $1,500 extra andfeatures a "torque on demand" systemwhich runs in 2WD mode until it detects alack of traction.

A fifth generation Sonata (NF project code)

was launched in 2005 as a 2006 modelincorporating competitive and industryleading features. Like the first generationmodel, it was designed with the North

American audience in mind and includesdesign influence from Michigan andCalifornia. The Sonata is Hyundai's firstrelease reflecting a new focus on safety.Reports indicate the company crashed 120early Sonatas to perfect the structure andbest engineer it to absorb and channel

impact energy around the passenger cabin. It has earned five star safety ratings for bothfront and side impacts. Even base models include more standard safety features than anyother car in a similar class including head curtain airbags, electronic stability control, tractioncontrol, antilock brakes, brake force distribution, and active headrests. Several enginechoices 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 hybridSonata may be sold in 2007.

2005Hyundai Tucson offering standard electronicstability control, a first for a small SUV

The U.S. 2006 Sonata LX



35

A fourth generation Grandeur (project codeTG) was also launched in 2005. In North

America it is known as the Azera. Built ona larger Sonata platform, theGrandeur/Azera includes a larger 3.8L

version of the Lambda engine (263 hp). Ithas more interior room than the BMW 760i,Mercedes S Class, and Toyota Avalon.The front-wheel-drive Azera rides on frontdouble wishbones and a rear multilinksuspension, with 16 or 17" wheels. At 192.7inches long, 72.6 inches wide, and 58.7inches tall, the Azera is 0.8 inches longer and wider and 2.8 inches taller than theoutgoing Grandeur. Safety features aresimilar 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 AutoShow (project code MC). The sedan reached dealerships in December 2005 as a 2006model. Passenger space has increased considerably over previous models. It is one inchwider, 1.8 inches longer, and three inches taller than the previous generation. Only the GLStrim 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 versionsof this new Accent indicating it could reach the Korean market in 2006. It was fitted with aBeta II, 1.4L CVVT engine (90 hp) plus a 16 hp electric motor which Hyundai indicatesboosts fuel economy by 44%.

IN MEMORIAM, JU-YUNG CHUNG

It is worth noting that Hyundai founder, Ju-yung Chung was one of the civilian forces at thehead of the effort to rebuild the war torn cities of Vietnam in 1977. He was made anhonorary Commander of the British Empire by England's Queen Elizabeth II. In 1982 hewas the first non-American entrepreneur and philanthropist to receive an honorary degree in

business from George Washington University. He received many other honorary degreesincluding a doctorate from John Hopkins University. Additionally he channeled a largeamount of Hyundai profits into philanthropic and civic causes throughout North and SouthKorea building hospitals, schools, and apartment complexes for Hyundai workers.

Fourth generation 2006Azera/Grandeur

The third generation 2006Accent sedan is morerefined and larger than previous generations



36

In March of 2001,Ju-Yung Chungwas admitted toSeoul's AsanMedical Center.

His critical case of pneumoniaworsened and hedied on March 21st,2001 in one of thehospitalsconstructed by hischarity. Ju-YungChung wasmourned as anational hero in

Korea and wascredited withrebuilding a war torn andimpoverishednation. Hyundaiofficials revealedthat in keeping withhis wishes that "hehad come emptyhanded and he would leave empty handed," he gave more than $57 million to the business

he founded in 1946

Ju-Yung Chung (1915 - 2001) is aKorean national hero.

To my way of thinking, there may be miracles in religi on but not in politics or ec onomics... We succeeded becauseour peo ple dev oted their enterprising spirits. T hey used the force of their minds. C onvicti on creates ind omitableefforts. T his is the key t o miracles... Man's potential is limitless.

Ju-Yung Chung



37

MANUFACTURING PROCESS

Stamping

In the Stamping Shop, the vehicle begins to take shape. Housed in theshop are large rolls of steel, each weighing between 20,000 and 40,000pounds. Cranes are used to lift the rolls and put them into the blankingmachine, where rectangular pieces, thin as a dime, are cut and stored inracks. The pieces are automatically moved to one of two large, stampingpresses 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 amazingautomated machines position stamped body parts and accurately weld them together to form the vehiclebody, called a ³body-in-white.

Both the Sonata and Santa Fe vehicle bodies move down the sameassembly 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 ³body-in-white

¡

moves from the Welding Shop, along a trestle into the Paint Shop for thenine-hour painting process. The vehicle first rotates 360 degrees in a unique electrocoat bath to prepare theentire body for paint. Eighty-one robots apply primer, a base coat using one of 15 different water-basedpaint colors, and a final clear coat which provides a beautiful shine and long-lasting protection. Since thePaint Shop is an environmentally-controlled area, Team Members must wear special overalls and gloves toprotect themselves and the paint¶s finish. A single particle of dust can affect the overall quality of a vehiclespaint finish. The Paint Shop has over four miles of conveyor systems to move the vehicle bodies througheach 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 thevehicle. The painted vehicle body moves through the trim area where wires, brake controls, and other partsare 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 areinstalled. In the chassis area, the underside of the vehicle is completed and the engine and drive train areconnected to the body. After the tires, battery, front and rear glass, and seats are installed, the doors arereattached to the vehicle. Oil, engine coolant, gasoline and other vital fluids are added, and then the vehicleis 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 meetsall 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 horsepoweris made here on site in Montgomery. Castings of engine blocks, heads and crankshafts are delivered fromsuppliers and machined to HMMA¶s exact specifications. Over 150 computer-controlled machines performprecision cuts to these engine parts. A sophisticated test laboratory performs precision computermeasurements 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 engineassembly where Team Members follow detailed procedures to assemble pieces of the engine. All enginesare first cold-tested for leaks, then hot-tested, by starting the engine to ensure it meets manufacturingspecifications. A Hyundai transmission is then married to the new engine to complete the assemblyprocess. After a final quality check, the engine is sent on a trestle to the chassis section of GeneralAssembly 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.



38

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.

Company Watch - Hyundai Motor India Limited (HMIL)

The Hyundai Motor India -

Hyundai's 6th manufacturing unit outside the parent country, is also the group's largest overseasproduction base. Even as the project was being conceptualized, Hyundai Motors India Ltd.(HMIL) wasalways going to play an important role in Hyundai Motors Company's international operations.

That the company is fully owned by the parent group and the integrated unit at Sriperambudur can todayroll out cars with almost 85% localized content, bears testimony that the Indian operations have been putdown 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 wasbuilt in record time. The plant is first self-sufficient manufacturing unit in India to be

independently invested by an overseas automobile company. Incorporated in May1996, the groundbreaking ceremony for the Chennai plant was held in December inthe 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. 2500crores. It has a capacity to make 120,000 cars and 130,000 engine transmission units per annumand 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 integratedmanufacturing 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 sourcingcomponents. The total vendor base consists of 60 companies located at the plant site itself. HMIL aims toincrease 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-





40

year 2000 HMIL will employ around 3000 workers operating in multiple shifts.

Hyundai today enjoys a market share of around 10% and is looking at the doubling that figure. Given theIndian market's response to the Santro, the company seems to be wellon course...

y Best customer servicey Best technologyy Best quality products

y Best value for people.

Hyundai Motor India Managing Director, Mr. H. S. Lheem

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.

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.



41

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.

HYUNDAI MOTOR MANUFACTURING ALABAMA, LLCWelcome to Hyundai Motor Manufacturing Alabama, LLC (HMMA), Hyundai's first assemblyand manufacturing plant in the United States. This $1.4 billion automotive plant is one of the most advanced assembly plants in North America.

HMMA currently provides employment for more than 3,000 people who are buildingHyundai's 2009 Sonata sedan and 2009 Santa Fe sport utility vehicle (SUV) at the HyundaiAlabama plant.

After more than 20 years in the U.S. automobile market and with "America's BestWarranty," Hyundai continues to reinforce its commitment to sell innovative, high-qualityvehicles at affordable prices.

Certified to the World's Highest Automotive Operating Standard In February 2007, HMMA achieved Certification to the International Automotive Task Force¶s(IATF) most rigid quality management standard, ISO/TS 16949, a set of QualityManagement System requirements specific to the automotive industry. ISO/TS 16949 is thehighest automotive operating standard in the world.

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.



42

Sustainability and Competitiveness for the Future

We, at Hyundai Motor Company, believe our global

success is founded on the support of our stakeholders ±

customers, shareholders and suppliers. The strong and

continuous support of all our stakeholders is critical to

realizing our aspirations of global leadership in the autoindustry.

By fulfilling our environmental and social responsibilities we

strive to be a model corporate citizen in every community

where we conduct our business. And we are making progress

to achieve global integration and alignment in our efforts to

address key environmental issues such as climate change.

Moreover, we are actively engaged in a variety of social

contribution initiatives to meet the highest standards of

corporate citizenship. We believe such efforts will set the

course for our pursuit of sustainability.

In May 2008, we inaugurated the "Corporate Social

Responsibility Committee" which promotes sustainable

management by seeking to balance qualitative and quantitative growth. Our sustainability management

initiative encourages stakeholder participation to ensure a wide range of views and opinions are

reflected in our business and corporate activities.

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.

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 alsocomfortably priced to be placed in the mid segment. The Hyundai has also slashed the price of its Santrocar by Rs 40,000. The engine is 1.1 litre with petrol and diesel variations The ABS and air bags areoptional accessories and it Hyundai-i10 is launched in India at Rs 3.4 lakh. The car is first launched inIndia. This small car is also comfortably priced to be placed in the mid segment. The Hyundai has alsoslashed the price of its Santro car by Rs 40,000. The engine is 1.1 litre with petrol and diesel variationsThe ABS and air bags are optional accessories and it also plans to export cars from India through theChennai plant.also plans to export cars from India through the Chennai plant.



43

The Hyundai i10 with its exclusive launch in India is powered by a 1.1 litre iRDE petrol engine. Theengine has a 5 speed manual transmission with a i-shift gear box which clears up the space between thdriver and the passenger which is a unique feature for this segment cars. Electric power steering option isalso available with other models.

The Hyundai i10 has a attractive front grill with large headlmaps, and offers enough boot space to seat 5people. All Hyundai i10 models have AC/heating, folding rear seats, dual tone beige interiors, rear seatbelts and an electronic trip and odometer as standard equipment. The top end car of the i10 has a sunroof which is agin a unique feature of the cars in the segmnt. There is a rear spoiler, leather coveredsteering wheel and gear knob, keyless entry with 2 DIN audio system. The steel body is light and hasbody 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. Tubelesstirs are in all the models and other top safety features like Anti lock braking system (ABS), seat belts withpretensioner, dual airbags for th edriver and the front passenger, auto unlocking doors whichautomatically 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.

Technical Specifications of Hyundai i10

Dimension & Weight

Overall Length (mm) 3565Overall Width (mm) 1595Overall Height (mm) 1550Wheelbase (mm) 2380Ground Clearance (mm) 165Front Track (mm) 1400Rear Track (mm) 1385Kerb Weight (Kg) 860-952(M/T)Fuel Tank capacity (l) 35



44

Engine iRDE 1.1Configuration In-line, 4 cylinder Displacement 1086 ccMaximum Power 66.7 ps /5500 rpmMaximum Torque 10.1 Kgm /2800 rpm

SuspensionsFront Suspension McPherson Strut with Stabilizer Bar and "I" type sub-frameRear Suspension CTBA with coil springRear Shock Absorbers Hydraulic

BrakesFront DiscRear Drum

TyreSize 155/80 R13Type Tubeless

Awards

CNBC TV 18 Auto Awards: Hyundai i10 crowned car of the year .

Hyundai

i10 D-Lite

Rs. 364026.00

Hyundai

i10 Era

Rs. 404501.00

Hyundai

i10 Magna

Rs. 433515.00

VEHICLE SUMMARY Body Type: Hatchback Hatchback HatchbackSegment: B+ Segment B+ Segment B+ SegmentTop Speed: - - -0 to 60: - - -

0 to 100: - - -Fuel Consumption: Highway - - -Fuel Consumption: City - - -Warranty: - - -

OUR RATINGS Appearance:

Comfort:



45

Features:

Performance:

Value for money:

ENGINE SPECIFICATIONS

Displacement: 1086cc, In-line, 4 cylinder 1086cc, In-line, 4 cylinder 1200cc, 16V, Kappa,DOHC

Engine Type: Petrol Petrol PetrolMaximum Power: 66.7ps@5500rpm 66.7ps@5500rpm 80bhp@5200rpmMaximum Torque: 10.1kgm@2800rpm 10.1kgm@2800rpm 11.4Kgm@4000rpmPower to Weight Ratio:

DIMENSIONSLength: 3565 mm 3565 mm 3565 mmWidth: 1595 mm 1595 mm 1595 mmHeight: 1550 mm 1550 mm 1550 mmHeadroom: - - -Rear Leg Room: - - -

Rear Seat Width: 0.00 cm 0.00 cm 0.00 cm

OTHER SPECIFICATIONSSeating Capacity: 5 5 5Tyre Size: 155/80 R13 155/80 R13 155/80 R13Suspension: - - -Turning Circle: - - -Boot Space: - - -Steering: Power Power Power Brakes: Front Disk, Rear Drum Front Disk, Rear Drum Front Disk, Rear DrumGears: 5 Manual 5 Manual 5 ManualGround 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.

Body Color Bumpers:

Tachometer:

Alloys:

ORVM Indicator:

Xenon Headlamps:

Trip Meter: 2 2 2

Headlamp Washer:

COMFORT AND CONVENIENCE

AC: ACwithout Climate Control

ACwithout Climate Control


Power Windows:



46

Central Locking: None Manual Manual

Remote Boot:

Remote Fuel Filler:

Rear Wiper:

Rear Defogger:

Rear Armrest:

Streeing Adjustment(Rake/Reach):Driver Seat Adjustment: Manual Manual ManualMusic System: - - MP3 Player

Leather Seats: - -

Door Mirror: Both Side Both Side Both Side

Tinted Glass:

Rear AC Vent:

Folding Rear Seats:

Sun Roof:

Buttons/Controls onSteering:

Auto Viper:

Auto Headlamp:

ACTIVE AND PASSIVE SAFETY

Airbag:

Parking Sensors:

Fog Lamp:

Traction Control:

EBD:

ABS:

ESP:

Rear Seat Belts: 2 2 2



47

Vehicle Comparison

Maruti

Wagon R VXi

Rs. 432000.00

Hyundai

i10 Sportz

Rs. 530475.00

VEHICLE SUMMARY Body Type: Hatchback HatchbackSegment: B Segment B+ SegmentTop 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:

ENGINE SPECIFICATIONSDisplacement: 1061cc , 4 cylinder 1200cc, 16V, Kappa, DOHCEngine Type: Petrol PetrolMaximum Power: 62bhp@6000rpm 80bhp@5200rpmMaximum Torque: 8.4kgm@3500rpm 11.4Kgm@4000rpmPower to Weight Ratio:

DIMENSIONSLength: 3520 mm 3565 mmWidth: 1490 mm 1595 mmHeight: 1660 mm 1550 mmHeadroom: - -Rear Leg Room: 59.5/76.5 cm -Rear Seat Width: 0.00 cm 0.00 cm

OTHER SPECIFICATIONSSeating Capacity: 5 5Tyre Size: 145/70R13 155/80 R13Suspension: - -Turning Circle: 9.20 mtrs. -



48

Boot Space: - -Steering: Power Power Brakes: - Front Disk, Rear DrumGears: 5 Manual 5 ManualGround 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: ACwithout Climate Control


Power Windows:Central Locking: Remote RemoteRemote Boot:Remote Fuel Filler:Rear Wiper:Rear Defogger:

Rear Armrest: -

Streeing Adjustment(Rake/Reach):Driver Seat Adjustment: Manual ManualMusic System: - CD player with four speaker

Leather Seats:

Door Mirror: Both Side Both Side

Tinted Glass:

Rear AC Vent:

Folding Rear Seats:

Sun Roof:

Buttons/Controls onSteering:

Auto Viper:

Auto Headlamp:



49

ACTIVE AND PASSIVE SAFETY

Airbag: 2

Parking Sensors:

Fog Lamp:

Traction Control:

EBD:

ABS:

ESP:

Rear Seat Belts: - 2



50

CHAPTER-5

Research methodology

Problem Definition: -

Comparative analysis of consumer preference between Hyundais i-10 and

Marutis 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

Engine performance

Easy loan availability

Discount & scheme availability

Low maintenance

High resale value

Price

Power.



51

Research Design: -

Descriptive: -To find out features which determine the costumer preference of i-10 in Morani

Hyundai at jaipur.

Sampling Design: - Convenience Sampling.

Population: - Customers who come in Morani Hyundai showroom at jaipur.

Sampling Method: - Non-Probability

Sample Size: - 100 customers.

Data Collection:-

Instrument: Q uestionnaire

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.



52

Table-1

(1) Rank in the order of preference the following factors you consider

while buying a new car.

FEATURES Frequency of

respondentBrand of vehicle 20%Interior space 6%Fuel efficiency 18%

Technology 5%Engine performance 11%Easy loan availability 7%Discount & schemeavailability

5%

Low maintenance 6%High resale value 6%Price 13%Power 3%

Findings:-

20% Respondents prefer brand of vehicle

6% Respondent prefer interior space

18% Respondents prefer fuel efficiency

5% Respondent prefer technology

11% Respondents prefer engine performance

7% Respondents prefer easy loan availability

5% Respondent prefer discount & scheme

6% Respondent prefer low maintenance

6% Respondent prefer high resale value

13% Respondent prefer price

3% Respondent prefer power.



53

Table-2

2. Information did you use to decide for model to purchase.

Finding:-

27% Responded prefer friends/Relatives.

23% Responded prefer magazine articles.

20% Responded prefer T.V ads.

30% Responded prefer internet.

Sources Frequency of respondent

Friends/Relatives 27%Magazine articles 23%T.V ads. 20%

Internet 30%



54

Table-3

(3) At the purchasing time customer most focus on:-

Sources Frequency of customer Authorized dealer 22%Auto finance company 20%Agent of the dealer/Broker 23%

Authorized dealer & Auto finance company 35%

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.



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Table-4

(4) Rank order the following brands against the features indicated.

Features. i-10 WAGON-R

2 Din music systems (Radio+CD+MP3) A+ A+

(1) FINDING:-

These factors get A+ grade in I-10 cars:- Clear lens head grill& bumper

Vibrant colors

Wheelbase

Fuel tank capacity(liter)

Clear lens head grill& bumper A+ A

Dynamic front grill & bumper A A

Vibrant color¶s A+ A

Stylish fabric A A

Wheelbase A+ A+

Fuel tank capacity(liter) A+ A+

Maximum power(Cubic Capacity) A+ A

Tube less tyre A+ _

Central locking A A

Sunroof A+ _

Metal finish inside door handles A+ A+

Steering wheel-leather wrapped A A

Digital clock A+ BLow fuel warning lamp A+ B

Seat belt warning A+ A+

Battery saver B B

Power windows A+ A+

Air conditioner with heater A+ A+



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Maximum power(Cubic Capacity)

Seat belt warning

2 Din music systems (Radio+CD+MP3)

Air conditioner with heater

Power windows

Low fuel warning lamp

Digital clock

Metal finish inside door handles

Sunroof

Tube less tyre

(2) These factors get A+ grade in WAGON-R:-

Wheelbase

Fuel tank capacity(liter)

Metal finish inside door handles

Seat belt warning

2 Din music systems (Radio+CD+MP3)


Power windows

(3) These factors get A grade in i-10:-

Dynamic front grill & bumper

Stylish fabric

Central locking

Steering wheel-leather wrapped



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(4) These factors get A grade in WAGON-R:-

Clear lens head grill& bumper

Dynamic front grill & bumper

Vibrant colors

Stylish fabric


Central locking

Steering wheel-leather wrapped

(5) These factors get B grade in i-10:-Battery saver

(6) These factors get B grade in WAGON-R:-

Digital clock Low fuel warning lamp

Battery saver.



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TABLE:-5

(5) Most preferred vehicle segment.

Segments Responded frequency

A Segment [minimum up to 3400mm] 22%B Segment [3401 to 4000mm] 20%B+ Segment [4001 to 4500mm] 30%C Segment [4501 to 5000mm] 18%D Segment [5001 to 5500mm] 10%

Finding:-

22% Responded prefer A Segment car.

20% Responded prefer B Segment car.

30% Responded prefer B+ Segment car.

18% Respondent prefer C Segment car.

10% Responded prefer D Segment car.



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CHAPTER-7

CONCLUSION

After the survey now I able to understand the importance of these

features with other features. How they affect customers towards µµi-10

& WAGON-R On the basis of survey I have come to some

conclusions:-

1. Most of customer prefer brand of vehicle because brand image is very

important.

2. Most of customer prefers internet advertisement.

3. Almost costumer prefers authorized dealer & auto finance company.

4. Most of costumer prefer µB+¶ segments car.

5. According to customer preference (A) i-10 have many good features

like:-

Clear lens head grill& bumper

Vibrant color¶s Wheelbase


Seat belt warning


Power windows

Low fuel warning lamp



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Digital clock

Sunroof

Tube less tyre

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.

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 pro ject, time and money were the ma jor limitations

with pro ject.

6. The conclusions arrived at, are based on a very less experience of the

researcher in this field.





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Hyundai I-10- WAGON R