Chairman’s Priority
Hyundai Motor Chairman Chung Mong-koo flew to the U.S., the largest automobile market in the world. He chose that country as the first place of his management by wandering around this year. Since Chung has led the global auto market with drastic winning moves so far, this visit is attracting attention.
For his five-day trip, Chung got on a plane bound for the U.S. on March 24 in order to visit Hyundai and Kia Motors’ sales and production subsidiaries and check its marketing strategies in the U.S. The country is an important market in where global automakers’ competitiveness can be recognized. Particularly, the vehicle demand in the U.S. is expected to increase this year, along with China, regardless of the slump in emerging markets. Accordingly, the competition in the market will grow.
This year will be challenging for Hyundai and Kia Motors due to the triple handicap of the weak euro and yen, the growing pickup truck market, and a product lineup shortage.
Due to the fall in oil prices, the demands of full-size SUVs and pickup trucks are increasing in the U.S. Therefore, Hyundai and Kia Motors, whose lineups are mostly sedans, are expected to struggle with the change in the market.
“The key to customer satisfaction is quality. We need to have top quality, which can dominate our competitors,” said Chung. This is what he ordered during his visit in the U.S. He also said, “This year, we need to prepare carefully from the pilot production of new cars before mass production. In particular, we also need to make multi-pronged efforts to secure the quality competitiveness of our cooperative companies.” His winning move this time is the top-class quality. It seems that Chung is planning to tap into the U.S. market with the quality to satisfy customers.
Indeed, Chairman Chung has led the market change with his drastic winning moves in every important inflection point of the global market. When the sales of Hyundai Motor in the U.S. dropped to 90,000 units in 1998, he introduced a 10-year or 100,000-mile powertrain warranty in 1999, based on the confidence of quality, and made a breakthrough for U.S. sales.
In 2009 when other automakers reduced their marketing due to the rapid drop in demand for cars from the global financial crisis, Hyundai Motor overcame the difficulties with an innovative marketing strategy of the assurance program.
The program promises customers that Hyundai would buy back their vehicles if they lost their jobs, went bankrupt, or became disabled within a year. As it eased customer anxiety about the future, sales went up by 9 percent year-on-year even at the moment that U.S. industry demand for the year decreased by 21 percent.
Also, Chung is planning to ask its local employees in the U.S. to make every effort to put quality first.
Meanwhile, Hyundai Motor sold 726,000 units last year, while Kia Motors sold 580,000 units. Both companies are breaking annual sales records every year. The company also aims to sell 1.41 million units this year, an 8 percent increase from last year.