Hyundai Motor Co.'s problems are well known: Asia's economy is struggling, Hyundai's image is much maligned in the United States, and domestic demand is anemic, with Korean sales off 50 percent since 1997.
But Hyundai Vice Chairman Chung Mong-Gyu is not dismayed. He said his company will use the crisis as an opportunity to restructure.
Speaking at the Automotive News World Congress, Chung advocated a three-part prescription for the Korean auto industry:
1. Korean automakers' size and production must increase. To survive, a global automaker must build between 2 million and 2.5 million vehicles a year, Chung said.
Hyundai makes about 1.3 million vehicles a year. Kia Motors Corp., recently acquired by Hyundai, produces about 1 million vehicles annually, Chung said.
With the addition of Kia, Hyundai would have ranked No. 10 in global sales in 1997, according to the Automotive News Europe 1998 Global Market Data Book.
2. Korean suppliers must get bigger and more capable.
'As automakers move to share components, powertrains and production lines, the parts industry must also expand economies of scale, improve technology and enhance competitiveness,' Chung said.
3. Korean automakers should seek alliances with advanced automakers, Chung said. Korea lacks some cutting-edge engine and transmission technology, for example, that American and European automakers have.
Said Chung: 'Strategic alliances will be pursued that secure sharing assets, mutual purchasing (of) core parts, and joint development of advanced technology.'