In 2000, Chung set up task forces at Hyundai's two main plants in Ulsan and Asan, South Korea, with the explicit purpose of improving the J.D. Power initial quality score.
To show how serious he was about the quality campaign, Chung put two top lieutenants in charge. Suh Byung Kee, senior executive vice president of Hyundai's quality division, and Shin Jong Woon, divisional executive vice president, oversee the 50-member task forces.
The teams were given wide latitude. Task force members have traveled to the Hyundai America Technical Center in Ann Arbor, Mich., once a year since 2002 to study U.S. roads, driver habits and weather and to monitor the foreign carmakers that did well in the J.D. Power study.
Chung also demanded written "quality commitments" from managers involved in new-model development. That seems to have paid off because the written statements could be used to justify the dismissal of a manager if defects turned up on cars.
The chairman also holds quality meetings twice a month with as many as 50 executives, specialists and engineers. They talk about customer and assembly line complaints and technical issues in detail.
Chung, 67, who also is chairman of Kia Motors Corp., usually flies to the United States every quarter to preside over the same kind of meeting. The latest one was held in May at Hyundai's U.S. headquarters in Fountain Valley, Calif.
Executives credit Chung with changing Hyundai's corporate culture. He put engineers in charge of the company, one executive said, because he thought they would know how to make better quality cars.
Four of the automaker's five top managers are technical men, including Chung and 52-year-old Vice Chairman Kim Dong Jin.
Their effort has paid off. In J.D. Power and Associates' 2004 Initial Quality Study, which measures defects in the first 90 days of ownership, the Hyundai brand beat Toyota. Hyundai owners reported 102 defects per 100 vehicles, while Toyota-badged vehicles had 104 defects. Hyundai had 143 defects per 100 vehicles in last year's study.