Chung leads Hyundai’s success saga in auto

For Hyundai Motor Group, the month of April has been memorable and pride-filled, with the world’s fifth-largest automaker reaching a milestone in car sales.

The combined cumulative sales of the group’s two auto units -- Hyundai Motor and its smaller affiliate Kia Motors -- reached over 100 million units on April 16. It took 54 years for the group to mark the achievement since it began producing cars in 1962.

“Hyundai Motor Group is not the first to reach the milestone in the auto industry, but it touched the 100-million mark in combined sales in a very short period of time,” said Kim Pil-soo, an automotive engineering professor at Daelim University.

The quality-driven management of chairman Chung Mong-koo, the company’s early adoption of globalization in production lines and continued investment in research and development were key drivers for Hyundai’s success saga in the auto sector, industry watchers said.

Under the chairman’s strong leadership, the auto giant’s annual production capacity skyrocketed to 8 million units in 2015 from 2.43 million in 2003. The 78-year-old Chung took the helm of the group in 2003, two years after Hyundai Motor was spilt from Hyundai Group along with eight other sister companies due to a family feud.

Hyundai Motor Group has become one of the most globalized companies here over the past 15 years. The company has sold more cars abroad than at home since 1998.The proportion of its car exports to total sales reached about 70 percent last year.

When it comes to leadership skills, the surviving eldest son of the late Hyundai Group founder Chung Ju-yung has many similarities with his father, having an entrepreneurial spirit and not being afraid to take risks for future growth.

Both considered global business expansion important from the initial stage of a new business, beyond the saturated and relatively small Korean market.

One big difference in leadership quality comes from his strict control over product quality.

In 2006, he said, “Quality is the fundamental competitiveness of a product. ... We cannot compromise quality for anything else.”

On the strength of such quality-centric management, Hyundai and Kia have transformed their brand image from cheap carmaker to top-tier competitor in global auto markets. Hyundai Motor launched its first luxury brand Genesis in an effort to upgrade the brand image.

With the prolonged global economic downturn, the business outlook for the Korean auto giant is not so bright this year. Operating profits of the automaker fell 15.5 percent to 1.3 trillion won ($1.13 billion) in the first quarter of the year, according to the company Tuesday.

Despite uncertain business conditions at home and abroad, the group chairman recently reiterated that the company has no problem meeting its sales target of 8.13 million units. At Hyundai, those who have seen him make the impossible possible are confident the automaker will achieve its performance goal.

By Seo Jee-yeon (jyseo@heraldcorp.com)