Over the past decade, Hyundai Motor has reminded me of a blind weight lifter - very powerful, but lacking vision. The company has always reflected the sheer willpower of its founder, Chung Ju Yung. But the company frequently stumbled when it entered foreign markets. Consider the United States. After a fast start in 1986 and a record year in 1988, Hyundai steadily lost sales for the next decade. In Canada, Hyundai opened its Bromont assembly plant in 1990, then closed it four years later due to low sales and quality problems. In Brazil, Hyundai prepared a site for an assembly plant, then abandoned the project.
More recently, Hyundai suffered a public relations embarrassment when it announced plans for a new world car, to be produced with DaimlerChrysler and Mitsubishi. There was one small problem: Hyundai's partners weren't ready to talk about it. In short, Hyundai often seems unsure of itself outside its protected home market. Loaded with debt and hobbled by squabbles within Chung Ju Yung's family, Hyundai's long-term survival appeared in doubt.
But rival auto executives would be making a serious mistake if they count this company out. Hyundai Motor Chairman Chung Mong Koo still has a low profile on the international scene. But he already can boast about Hyundai's progress in the two years of his stewardship. Sales are up sharply in the company's two major markets, South Korea and the United States. Kia, which was ready for the junkyard when Hyundai acquired it in 1997, is now profitable. Based on his plans to make Hyundai one of the world's top five automakers, Mong Koo also appears to have the single-minded ambition of his father.
Perhaps more important, Mong Koo appears to understand his father's shortcomings. Chung Ju Yung's autocratic management style worked well within South Korea's borders. But it's a prescription for failure in overseas markets where Hyundai cannot control events. Mong Koo claims he wants to foster a more democratic atmosphere within Hyundai, giving lower-ranking managers more authority. If he is serious, then Hyundai has a fighting chance to prosper as an international company. At age 84, Chung Ju Yung says he is ready to retire. Now it's time for Hyundai to chart a new course.
You can e-mail David Sedgwick at [email protected]