Chung leads Hyundai Motor’s meteoric ascent
By Kim Tae-gyu
If any CEO was asked to more than triple a company’s top line and quadruple its bottom line in 10 years, chances are that he or she would simply refuse to take the top job.
Yet, there is a businessman in Korea who achieved this seemingly impossible mission during the first decade of the new millennium — Hyundai Motor Group Chairman Chung Mong-koo.
The country’s largest automaker comprising Hyundai Motor and Kia Motors chalked up a mere 45.9 trillion won in turnover in 2001 but the figure jumped by more than three times to 154.4 trillion won last year.
The Seoul-based group, the nation’s No. 2 conglomerate, also cranked up its net profits over four-fold from 2.86 trillion won in 2001 to 13.54 trillion won in 2010.
In terms of sales, Hyundai and Kia combined ship 5.75 million cars last year, more than double the figure from 2.46 million in 2001 via aggressive investments globally.
The group aims to sell 6.33 million vehicles this year and the goal is expected to be easily reached because it has sold 6 million cars during the first 11 months of 2011.
Its charismatic 70-something leader Chung is credited with spearheading the impressive feat through both organic growth and acquisition based on his consistent focus on quality.
No company head would say that quality is not important. But Chung has been unique because his remarks are all about this whenever he delivers a speech. Things are similar when he speaks in person, according to his aides.
In a new-year speech in 2005 he said, “In order to increase the competitiveness of our brand, we should come up with a vehicle, which motorists can trust, and the basic point is the highest quality.”
In 2006, he said “Quality is the fundamental competitiveness of a product and it has everything to do with our raison d’etre. We cannot compromise quality for anything else.”
Last year, Chung noted, “We must further strengthen our quality management so that we can reward our customers for their trust and confidence in us.”
On the strength of such quality-centric stewardship, Hyundai and Kia have transformed its image from a second-string brand to a top-tier competitor in world markets.
In 2004, J.D. Power and Associates, a U.S.-based research outfit, announced that Hyundai models nudged past those of Toyota to rank fourth in its initial quality study.
Back then, U.S. media put the unexpected exploits of Hyundai as the following, “Man bites dog,” or “The Earth is flat.”
In 2010, J.D. Power said that Hyundai Motor recorded 148 points in its vehicle dependability study, down 13 points from the previous year, to take the sixth slot in the world’s second largest automotive market.
The lower the points are, the better the quality because the number is about counting overall problems of vehicle models.
In 2009, the Hyundai Genesis sedan garnered the much-coveted Car of the Year Award by a jury of 50 automotive journalists, which reviewed all new cars for calendar year 2008.
This year, Hyundai Sonata was among three candidates shortlisted for the prestigious honor.
At the age of 73, Chung is still active as the chief of the oversized conglomerate whose affiliates include the nation’s primary contractor — Hyundai Engineering and Construction — and No.2 steel maker — Hyundai Steel — on top of the flagship automakers.
He usually arrives in his office in southern Seoul no later than 6:30 a.m. to get briefings from the heads of Hyundai Motor Group units whose number amounts to 63.
He also typically works at his office on Saturdays. Under his stewardship, Hyundai looks to further climb up the corporate ladder in global rankings and the company is positive because its engines, or core competency for any automakers, are gaining prominence.
WardsAuto, an authoritative U.S. media publication specializing in the automobile industry, chose Hyundai Motor’s large-sized Tau 5-liter V-8 engine as one of its best 10 engines in 2009.
The engine kept the prestigious award, dubbed the equivalent of the Oscars for car engines, for the next three straight years.
Its 2012 10 Best Engines Winners included the 1.6-liter DOHC 1-4 Gamma, thus demonstrating that Hyundai Motor Group has a strong edge not only in big-sized engines but also in those for compacts.
“Hyundai spent three years on the list with its excellent Tau 5-liter V-8, but 2012 brings evidence the automaker can deliver world-class small engines as well,” WadsAuto said in a press release.
“Matched with an excellent six-speed manual transmission for our evaluation, this package makes the Accent an easy pick for B-class car shoppers. Priced a shade above $14,000, the Gamma-equipped Accent is excellent value that will surprise and delight any first-time buyer. We also were impressed by the engine’s efficiency mated with a six-speed automatic in the heavier and less aerodynamic Kia Soul.”
The development of its own engine was masterminded by Chairman Chung in the 1990s and reaped fruits in a handsome fashion, Hyundai officials said.
Another upside for Hyundai is its efforts in electric cars, which are also one of Chung’s top priorities, with him spearheading the development of the country’s first electric car BlueOn last year.
Equipped with high-efficiency electric motors and long-lasting rechargeable batteries, BlueOns boast a maximum speed of 130 kilometers per hour. It also takes 13.1 seconds for the futuristic vehicle to top 100 kilometers an hour after starting, which is faster than many existing gasoline cars.
In addition to profitability, there is another bottom line to which Hyundai Motor Group is paying attention — corporate social responsibility (CSR).
Under Chairman Chung’s leadership, Hyundai has put forth great efforts to stand out in both of the two bottom lines as amply demonstrated by its cross-group campaigns.
Double bottom lines
In 2008, the group homed in on a long-term vision for its CSR activities, which are categorized into four segments.
The four sectors are “Easy-move” for better mobility for the disabled, “Safe-move” for improved car safety, “Happy-move” for voluntary activities for the needy and “Green-move” for eco-friendly activities.
For example, Hyundai Motor Group has supported children whose parents have been killed in car accidents, which marks one of the major programs of its Safe-move initiative.
In another instance, the group created a pair of social enterprises to realize the Easy-move initiative, which manufactures different kinds of mobility aid and equipment for the disabled.
Its CSR activities are carried out without regard to national borders as it conducts a set of programs across the world — one of which has been to plant trees in Mongolian deserts since 2008.
“We are required to consistently care about needy neighbors instead of carrying out just one-time charity activities. Practice is most significant no matter how small it is,” Chung said.
“Hyundai Motor Group has to become a corporate role model in offering dreams and hopes to needy citizens through taking the lead in helping them.”