INTRODUCTION

Hyundai has been on the front line of modern car design and manufacturing. The very
word “Hyundai” is appositely derived from the Korean word “hanja” meaning
“modernity.” Constantly pushing the envelope, the company has a long history of
technological innovation.
But it hasn’t evolved merely for the sake of evolution. Rather, the firm has always had
one goal in mind: building cars of unbeatable quality. These days, Hyundai is more
devoted than ever to create the ideal driving experience.

Hyundai Motor Company officially launched its brand in 1967, but the origins of the auto
giant go back a bit further, to the post-war world of South Korea. It started in 1947 when
an entrepreneur named Chung Ju-Yung founded a small business called Hyundai
Engineering and Construction Company. The aim was simple: to help South Korea rebuild
and industrialize after the ravages of World War II.

Unfortunately, the Korean War dashed his hopes and his business plan. Following so
quickly on the heels of the last major war, forced Chung Ju-Yung to abandon the company
and instead seek work at the Korean Ministry of Transportation. Although it would be
over a decade before the formation of Hyundai Motor Company in the late 1960s, it was
there, at the nation’s transportation agency, that the seeds of Ju-Yung’s next project
were planted.

Hyundai Motor Company officially got off the ground in 1968 with the introduction of its
very first model “the Cortina” which the company collaborated with Ford Motor Company
to manufacture the Cortina. The release of the car was the first step in what would be a
long and successful journey. Manufactured in the Ulsan plant, in the southeastern region
of the country, the car was enough of a hit to encourage Chung Ju-Yung in his
undertaking.

Indeed, after the rollout of the Cortina, he decided to step up his efforts to create a
robust and independent automotive business. To realize his dreams of creating high-
quality, mass-produced vehicles for the South Korean public, Chung Ju-Yung brought in
several British automotive executives and engineers, starting with George Turnbull,
formerly the managing director of Austin-Morris.

Together they designed the Pony, released in 1976, breaking ground as South Korea’s
first mass-produced car.
 MANAGEMENT BOARD
Classification Title Name

Chairman (Standing) Euisun Chung

President & CEO (Standing) JaeHoon Chang

Vice President & CEO

Dong Seock Lee
(Standing)
Internal Director

Executive President
Chung Kook Park
(Standing)

Executive Vice President

Gang Hyun Seo
(Standing)

Director (Non-Standing) Eun Soo Choi

Director (Non-Standing) Chi-Won Yoon

Director (Non-Standing) Eugene M. Ohr

Independent
Director
Director (Non-Standing) Sang-Seung Yi

Director (Non-Standing) Dal Hoon Shim

Director (Non-Standing) Ji Yun Lee

PRESENCE OF THE COMPANY GLOBALLY AND
NATIONALLY

　 2020 2019

Brand Value (in Compared to Overall Overall Ranking among

S.no Brand
$100,000 unit) 2019 Ranking Ranking Automakers

1 Toyota 515.95 -8% 7 7 1

2 Mercedes-Benz 492.68 -3% 8 8 2
3 BMW 397.56 -4% 11 11 3
4 Honda 216.94 -11% 20 21 4
5 Hyundai 142.95 1% 36 36 6
6 Tesla 127.85 N/A 40 N/A N/A
7 Ford 125.68 -12% 42 35 5

 Hyundai’s Global Brand Value rose 1 percent year-on-year to $14.3

billion, ranking fifth among global automotive brands and 36th overall

 Hyundai ranked fifth among automotive brands for the first time since
2005, being the only automotive brand on this year’s list with rising
brand value amid COVID-19

 Launch of dedicated EV lineup brand IONIQ, investments in future

mobility and brand, quick market response via online sales channels and
social contribution activities strengthen the company’s brand power
PRESENCE OF THE COMPANY NATIONALLY

 The leading car manufacturer in South Korea was the local brand
Hyundai Motor Company, followed by Kia Motors in 2021. Vehicles
manufactured by Hyundai Motor Company accounted for 40.2
percent of automobile sales in South Korea that year. For decades,
the car industry has grown exponentially and has also been an
indicator of the country’s economic growth
 Nature of demand for Hyundai motors

Size of the company in terms of turnover and profit of

last 5 year
(Unit: billion KRW)
Classification 2021 2020 2019 2018 2017

Sales Revenue 117,611 103,998 105,746 96,813 71,875

Profit for the year 5,693 1,925 3,186 1,645 3,259

  Hyundai Motor’s 2021 global sales total 3.89 million

units, up 3.9% Y/y 
  December sales recorded 334,242 units, a 10.9%
decline Y/y
  Company targets over 4.3 million global vehicle sales in
2022 

 January 3, 2022 – Hyundai Motor Company announced its

2021 global sales performance today, recording a 3.9 percent
increase from a year earlier despite the ongoing pandemic
and supply chain issues.
 
Sales outside of Korea rose 7 percent to 3,164,143 units
thanks to the company’s proactive and market-specific
strategies as well as the popularity of its SUV models and
growing eco-friendly vehicle lineup.
 
Sales in Korea declined 7.7 percent to 726,838 units amid the
semiconductor shortage that has affected the global
automotive industry.
 
For December, monthly global sales totaled 334,242 units,
including 268,130 for overseas markets and 66,112 for the
Korean market.
 
In 2021, Hyundai was able to jump-start its transition into
electrification thanks to the successful launch of IONIQ 5, the
first dedicated battery electric vehicle. The company’s
positive sales results stemmed from strategic supply chain
management despite the challenging business environment
caused by the ongoing pandemic, semiconductor supply
issue, and fluctuation of raw material prices.

Hyundai reported sales revenue of 117.6 trillion South

Korean won (or about 99 billion U.S. dollars) in 2021.
Founded in 1967, Hyundai would go on to manufacture the
first South Korean car. The passenger car segment is the
largest contributor to the company's revenue.
 The demand for the product for the
last 5 years

Sales of Hyundai motors

(Unit: thousand units)

Classificatio 2021 2020 2019 2018 2017

n
Sales 3,912 3,745 4,426 4,589 4096

South Korean auto conglomerate Hyundai Motor

Group has set this year’s sales target at 7,473,000
units, 12.1 percent higher than last year, on
expectations for stronger demand for green cars, sport
utility vehicles, and premium Genesis models amid
easing in virus and chip bottleneck setbacks.

According to a disclosure on Monday, Hyundai Motor

Co. targets to sell 4,323,000 units globally this year,
and its sibling Kia Corp. has 3,150,000 units, which
would be 12.1 percent greater than last year’s sales of
6,668,037 units.

Last year, they failed to meet the annual sale target

due to output disruption from global chip shortage –
Hyundai sold 3,890,987 units and Kia 2,777,056 units.

Hyundai Motor this year aims to sell 732,000 units at

home and 3,591,000 units abroad, gaining 0.7 percent
and 13.5 percent, respectively from last year. Kia
targets to sell 562,000 units locally and 2,588,000 units
overseas, up 5.0 percent and 15.4 percent on the year.

Domestic sales offset sales slump

In 2020, passenger car sales were down roughly 15
percent for Hyundai, despite a 6.2 percent increase in
sales in South Korea. Automotive sales in China slowed
down dramatically, contracting by about 32 percent
year-on-year. The market share of South Korean
passenger car brands in China has fallen from 4.7
percent in 2019 to 3.5 percent in 2020. As alternative
fuel vehicles are becoming the favored technology in
China, Hyundai is expected to significantly increase its
number of “green” models which will be necessary to
compete in the future market.
The shift toward sustainable
technologies
To respond to shifts in consumer demand, Hyundai
announced plans to invest more in sustainably-
powered cars. The company is planning to build its first
overseas hydrogen fuel cell plant in China. The Hyundai
Ioniq Electric was already the world's most
environmentally friendly MY 2019 car

Competitors of Hyundai
 Several brands in the market are competing for
the same set of customers. Below are the top 12
competitors of Hyundai:
 Honda
 Toyota
 Nissan Motors
 Fiat
 Maruti Suzuki
 Tata Motors
 Skoda
 Volkswagen
 Ford

Hyundai
product
I20 HONDA TATA MARUTI VOLKSWAGEN TOYOTA
JAZZ ALTROZ SUZUKI POLO GLANZA
BALENO
I10 FORD TATA MARUTI VOLKSWAGEN WAGON
 FIGO TIAGO SUZUKI POLO R
SWIFT
CRETA TOYOTA MARUTI JEEP CITRON C3 XUV
URBAN GRAND JEEPSTER AIRCROSS
CRUIZER VITARA
VENUE TATA MAHINDRA NISSIAN KIA SONET
MARUTI
NEXON XUV 300 MAGNITE SUZUKI
VITARA
BREZZA
ALCAZAR TATA MG MAHINDRA VOLKSWAGEN KIA
SAFARI HECTOR XUV500 TAIGUN CARENS
PLUS
VERNA MARUTI HONDA SKODA 0 VOLKSWAGEN TOYOTA
SUZUKI CITY SALAVIA VIRTUS YARIS
CIAZ
X MARUTI HONDA TATA ------------- ----------
CENT/AURA SUZUKI AMAZE TIGOR
DZIRE

Competitors of the product

Identify factors affecting demand for Hyundai

 Culture and social conception of customers are related and affect

Hyundai’s car decision:- Hyundai needs to enhance social value for users
 through product advertising strategies and brand promotion to affirm their
customers' social status. In addition, it should be noted that Hyundai cars are also
valuable products, so administrators should display products in luxurious places
where many people pass by, in crowded urban areas with many offices. trade
centers. The Hyundai cars which are displayed in luxury stores will make customers
feel proud and contribute to increasing the self-expression value of consumers.

 The reference group factor is relevant and influences the Hyundai car
buying decision:- To influence the customers’ intention and decision to buy the
cars, Hyundai needs to promote propaganda. The research results show that the
objects "family, friends, relatives" are the main source of information for customers
and greatly influence the decision to buy Hyundai cars so dealers can take advantage
of the channel. In addition, promoting the Hyundai brand on the internet, and social
networks to promote Hyundai's image to consumers is also a good suggestion.

 The Hyundai brand factor is relevant and influences the decision to buy a
Hyundai car:- This is one of the two factors that have the smallest impact on
customers' intention to buy Hyundai cars. Therefore, agents need to focus on
building their image and reputation through attractive advertising and marketing
programs while ensuring a reputation for vehicle quality, service quality, and
elements of brand management.
 The demand and consumer motivation are related and impact the
decision to buy Hyundai cars:- To stimulate customers' needs and motives,
Hyundai needs to focus on market research through their dealers. By enhancing the
emotional value of customers, the dealers can enable the customers' demand and
buying motivation by increasing the level of brand awareness for consumers.

 Perception of customers' vehicle characteristics is related to and impacts

the decision to buy Hyundai cars:- Hyundai dealers need to import different
types of products that are favored by customers to express their values, enhancing
the value of the riders. Focus on eye-catching displays to create product luxury and
good effects for customers when coming to the store. Besides, when serving
customers, employees must show thoughtfulness in the process of contact with
customers, giving customers a sense of respect.

 Economics feelings of customers involve an impact on the decision to

buy a Hyundai car:- Hyundai Thanh Cong Vietnam Automobile Joint Stock
Company should study the needs of each segment of customers such as color,
 harmonious coordination of vehicle parts color to fit each customer’s psychology
depending on the region.

Demand forecasting of the product for the year 2019

(Sales in unit)

Dec - 2019 Dec -2018 y/y change

Global sales 396,569 412,750 -3.9%

 Sales in Korea are based on retail sales while Overseas Sales (Global Sales excluding Korea) are based
on wholesales.
 Sales result includes entire sedan, SUV, and CV models produced by Hyundai Motor.

Hyundai Motor Company announced December global sales of 396,569 units today, a
3.9 percent decline from a year earlier.

SEOUL, December 2, 2019 – Hyundai Motor Company today announced November

global sales of 392,247 units,
a 2.8 percent decline from a year earlier.
Korea Sales
Sales in Hyundai’s home market slid 1.5 percent year on year, totaling 63,160 units. The
new Grandeur, also called
Azera in some markets outside of Korea led the sales in Korea following an introduction
of the face-lift model in
November. Grandeur was ranked as the country’s best-selling model last month with
more than 10,000 deliveries
in its debut month and it recorded over 40,000 pre-order bookings. All-new Sonata
sedan also helped drive Korea
sales together with its hybrid model.
Combined sales of Hyundai’s SUV lineup totaled 20,813 units in Korea and sales of the
NEXO fuel-cell electric SUV
sales reached its monthly record of 699 units last month.
Overseas Sales
For markets other than Korea, sales declined 3 percent to 329,087 units compared with
339,237 units a year earlier
as weaker sales in emerging markets offset brisk deliveries in advanced markets such
as the US.

Nature of production of Hyundai

Its top-selling sedan, according to the company's sales data in 2021
was the Elantra, which recorded 380,907 units. This model was
produced in several plants, including in South Korea, the United
States, and China, among others. Another popular sedan model is
the Accent/Verna, which is popular in emerging markets including
China, India, Middle East, as well as in developed markets like North
America. This model ceased to be produced in South Korea in 2019,
as its production base was moved to Mexico and India.[124]

Other sedan models are the mid-size Sonata, executive Grandeur,

and several China-oriented models which consist of Reina, Celesta,
Lafesta, and Mistra.

Some hatchback models developed by Hyundai have been divided

into models developed to cater to the Indian market and the
European market. Both the i10 and i20 are models built in India and
Europe, with several changes between the Indian and European
versions to ensure the model could fit according to each market.
Other hatchback models include the entry-level Santro first
introduced in 1998 for the Indian market, the i30 C-segment car for
developed markets, the HB20 for the Brazilian market, and the
hatchback version of Accent for markets outside India and Europe.

Quantum of production

(unit)
 
In 2020, around 521 thousand vehicles were produced in the Hyundai Motor
Company's factory based in India. Production volume had increased in recent
years compared to 2015 but decreased in recent years. Hyundai Motor's India
plant recorded the second-highest production volume in 2020, stopped only by
the Ulsan plant located in South Korea.

Inventory of last 5 years

 Years Inventory

2017 10,279,904

2018 10,714,858

2019 11,663,848

2020 11,333,734

2021 11,645,641

Employment in the company 5 years report

Hyundai Motor Company employed 122,217 employees in 2019, up 0.59%
compared to the previous year. Historically, between 2009 and 2019, the firm's
workforce hit a high of 122,217 employees 2019 and a low of 78,639
employees in 2009.
Average personnel cost stood at USD 5,631 per month per employee, 1.01%
higher than the previous year. This figure was USD 2,724 per month some 10
years ago.
Staff cost represented 8.89% of sales in 2019, 5.3 pp higher than a decade ago.

Whether the company is benefiting from

economies of scale or economies of scope?
I will use the concept of a "production model" to find clues to
explain the puzzling success of Hyundai Motor. A production model is
defined as a company governance structure that enables a durable
implementation of a specific profit strategy. It is composed of
production organization, product policy, and employee
relationships.3 Applying the concept of a production model to the
case of Hyundai, I will explain the characteristics of its particular
production model as follows.
First, Hyundai has reduced its dependence on direct labor, while
increasing its dependence on production facilities by raising levels of
automation and information technology in the production process.
Hyundai's production model is largely led by engineers who take
charge of the whole process, while the role of factory workers is
limited to supporting the operation of the production facilities.
Among the production workers, indirect workers play the main role
in maintenance and quality control in the operation of the
production facilities to ensure no stoppages, while direct workers
play a minor role in preventive maintenance and monitoring —
which complements the indirect workers' job. Most of the direct
production workers could be easily replaced by other workers
because they do simple jobs that don't require a high degree of skill.
Second, Hyundai has increased the importance of product
development, while establishing unique procedures to improve the
quality level during the late stages of product development. At the
stage of "pilot production," research center engineers work to meet
the requirements of production lines in advance, while a small
number of experienced workers produce test models in a
large-scale pilot plant located near the research center. During pilot
production, Hyundai solves about 90 percent of the problems that
could be encountered during mass production. The use of a large
pilot plant is, therefore, one important characteristic of Hyundai's
production model.
 
Third, a significant portion of Hyundai's production process is
outsourced to parts makers, and many outsourced parts are sub-
assembled into modules before going to the final assembly line.
Modular production is defined as a production method in which
parts are sub-assembled into interchangeable units to be supplied to
the final assembly line.4 At Hyundai, outsourcing has been facilitated
by modular production. This is another characteristic of Hyundai's
production model. By combining outsourcing with modular
production, Hyundai has gained huge benefits not only in terms of
cost savings but also in improvements in quality and productivity.
Hyundai has therefore been able to concentrate on product
development and marketing by reducing the burden of parts
production.
 
These three characteristics of Hyundai's production model contrast
with the Japanese production model, which consists of the following:
1) heavy dependence on highly skilled direct workers who actively
participate in the production processes; 2) development of products
in close interaction with the requirements from factory production
lines rather than in pilot plants; 3) low use of outsourced modular
production because of long-term stable relationships with parts
makers.
 

 Nature of cost of assigned company

Total expenses of the company of 5year
(In millions of Korean won)
Year Financial Other Expenses
Expenses

2017 1,120,386 1,367,471

2018 600,867 1,487,037

2019 475,218 1,457,425

2020 955,991 1,630,144

2021 548,410 1,834,405

Expense on the raw material of 5

years
(In millions of Korean won)

Years Expense on raw

material

2017 1,314,902

2018 1,363,298

2019 1,468,306

2020 1,633,579

2021 2,536,671

Rate of retail interest (Interest on

loan)
 Short-term borrowings / Long-term debt

Lender Annual interest rate

%
Citi Bank and others 0.11~1.63
Korea Development Bank 0.12~10.13
and others
KEB Hana Bank and others 0.15~4.40
Shinhan Bank and others 0.19~2.80
RBC and others 1.46~1.62
Mizuho Bank and others 0.01~12.17
NH Bank and others 1.52~2.61
BNK Investment & Securities 1.19~2.12
and others
HSBC and others 0.55~1.85

Differentiate between explicit cost and implicit

cost
BASIS FOR
EXPLICIT COST IMPLICIT COST
COMPARISON

Meaning The costs which involve The costs in which

the outflow of cash due to there is no cash outlay
the use of factors of is known as Implicit
production is known as Cost.
Explicit Cost.

Alternatively Out-of-pocket Costs Imputed Costs

known as

Occurrence Actual Implied

Recording and Yes No

Reporting

Estimation of Cost Objective Subjective

Which profit can Accounting Profit and Economic Profit

be calculated with Economic Profit
the help of cost?

Example Salaries, rent, Interest on the

advertisement, wages, owner's capital, Salary
etc. to the owner, rent of
owner's building, etc.
which do not occur in
reality.

Major competitors of Hyundai

  Tata motors
 Toyota Motor Corporation
 Volkswagen
 GM Motors
 Nissan
 Honda Motors

Market shares of Hyundai

 In 2021, the ranking of the world’s largest car brands was topped by
Toyota with a market share of around 10.5 percent. The Toyota brand is
owned by Japan's Toyota Motor Corporation, the world's largest motor
vehicle manufacturer, surpassing the 2020 incumbent, the Volkswagen
Group.

Level of investment in the business

  Total Assets

KRW 233.95 trillion

 Sales Revenue

KRW 117.61 trillion

 Credit Ratings

Baa1
Moody’s
 

BBB+
S&P
 

AA+
NICE Investors
Service

Identify the competitive market (perfect competition,

monopoly, monopolistic, oligopoly) of the firm
Pricing and non-pricing strategy of the firm
 Oligopoly

Definition of oligopoly
An oligopoly is an industry dominated by a few large firms. For example, an industry
with a five-firm concentration ratio of greater than 50% is considered an oligopoly.

Examples of oligopolies
Car industry – economies of scale have caused mergers so big multinationals to
dominate the market. The biggest car firms include Toyota, Hyundai, Ford, General
Motors, and VW.
 Petrol retail – see below.
 Pharmaceutical industry
 Coffee shop retail – Starbucks, Costa Coffee, Cafe Nero
 Newspapers – In the UK market share is dominated by tabloids Daily Mail, The Sun,
The Mirror, The Star, and Daily Express.
 Book retail – In the UK market share is dominated by Waterstones, Am, Azon, and
smaller firms like Blackwells.
The main features of oligopoly
 An industry that is dominated by a few firms.

Sustainable practices by the company

Discuss as an entrepreneur how you can start a business with a company,
identify the possibilities of an association with the company

In the Fourth Industrial Revolution era, industry boundaries are disintegrating amid a rise of
convergence and change. Mindful of such global megatrends, Hyundai is accelerating its
innovation drive powered by advanced technical prowess. Ever present in Hyundai’s 50-year
journey has been the notion of the human race. Without aspirations for humankind, our
technological innovations would have been impossible. As an extension of our ever-hopeful
journey, in 2019 we adopted a new brand vision “Progress for Humanity” as a way to
confirm our determination to create more valuable time for all humanity. Hyundai is now
going beyond being an automobile manufacturer to become a mobility solution provider
that allows people to easily move and connect spaces and places, thus enabling them to
make their time more valuable. We will provide mobility services that make every moment
of life more valuable than before by more thoroughly understanding people’s daily lives, in
our journey toward progress for humanity.

The risk perspective for the company highlights the

dimensions where the company is facing risks.
Hyundai's focus on quality risks emerging market share
India/SEOUL (Reuters) - Running around the clock and selling everything it can build,
Hyundai Motor’s Indian factory is bursting at the seams. But as demand grows and rivals
scale up, the carmaker has chosen to take its foot off the pedal.
Hyundai's 005380.KS’s strategic decision to focus on quality over quantity, even as its
production lines are stretched in India and elsewhere, risks losing hard-won market share
and is forcing it to divert output from its plant outside Chennai away from exports to other
high-growth markets to meet domestic demand.

The South Korean firm, with affiliate Kia Motors 000270.KS has surged to the No. 5 spot in
the global automaker rankings by offering stylish models at affordable prices.

That formula has been especially successful in emerging countries such as India, where it is
No.2 by market share.

The decision to slow down was prompted by fears a growing reputation for well-built cars
could suffer in a headlong dash to churn out more vehicles, but it has sparked rumbles of
discontent among some executives at the South Korean firm.

“Our operations all over the world are calling for more cars. Executives tell the chairman
that capacity should be expanded because they have to sell more cars,” a senior Hyundai
executive in Seoul told Reuters.

“But the chairman says, ‘What are you talking about? We have enough capacity. What we
need now is stability,” he said, speaking on condition of anonymity due to the sensitivity of
the issue.

The chairman is Chung Mong-Koo, whose father Chung Ju-Yung founded the Hyundai Group
“chaebol”, as South Korea’s powerful conglomerates are known.

Risks and Challenges

Hyundai Motor Company (2011) pointed out that the company identified 2010, as a year of
new challenges to respond to environmental sustainability and to produce eco-friendly
vehicles, while in 2011; the company aligned to it all plants to develop the company as an
organic company with appropriate emphasis to the innovation of new environmental-
friendly vehicles.

To address such challenges, the need to have competitive superiority of technological

innovation, essential to strengthen management skills, and enhanced investment in green
technology to encounter the competitors both in-home and abroad. Meanwhile, in the
domestic market, the company has been striving with competitors while the emerging
market as India has serious risks of both eco-friendly and cost-effective solutions for
automobiles. On the other hand, though it was spoken that the global financial crisis has
already over, the US market trend demonstrates that it is going to keep serious shocks in
the overall market for which Hyundai Motor Company needs to re-engineer its strategies to
gain a competitive advantage from the diversified strategy.

GLC (2009) identified that the company has been suffering from the tremendous risk of
accounting fraud and added that in 2007, the CEO Mr. Chung evidenced to engaged in a
personal fraud of KRW 90 billion from the company and more KRW 360 billion cheating
through earning management, for which the Seoul District Court has sentenced him for
three years imprisonment. To overcome such risks the Hyundai Motor Company needed to
have a particular accounting standard to protect the unholy alliance of the management and
accountant and auditors.

Discuss as an entrepreneur how you can start a

business with a company, and identify the
possibilities of an association with the company.
Hyundai is a global car manufacturer that has a goal of mass-
producing electric cars by 2030. To do so, they need charging
stations to be conveniently located at the customer’s house. Help
Hyundai make its goal a reality and start its own business by coming
up with an idea to provide them with charging stations. and provide
information about the charging station whether it is free or engaging
while they are traveling we can do this with the help of AI
technology.

When people need to find a charging station, they can go to our

website, input the location of their mobile devices and find the
charging station near them. Provide information about charging
stations near them while they traveling

As a company, we can provide car owners with charging station

locations as well as advertise the services at their nearest location.

1) create an app

2) create partnerships with car dealerships

3) charge customers a monthly subscription fee

4) train AI to recognize each customer's data (must be careful not to

share anything personally identifiable)

5) set up partnerships with utilities to allow for charging stations