Hyundai Globale Expansion

Team Member :
Kankana Basu, Enkhmandal Bayarbat, Jing Lu
Outline
History of Hyundai Organisation

Global long term objectives

SWOT & Value proposition, break down to key markets
International market adaption (Enkhmandal)
America (Enkhmandal )
China & India (Jing & Kankanda)
Germany ( Kankanda)


Assumption for further global expasion

History of Hyundai Organisation
1967 foundation by Ju-Yong Chung
1986 FDI in USA
1996 FDI in India
1998 Aquisition Kia Motors in 1998
1999 Reorganisation (cost & Know-how)
2000 Plan of Expansion overseas markets in 2000
2002 FDI in China
2003 FDI in Europe

Long term objectives
global leader in automotive industries
overview the global vehicle market

SWOT Analysis
Internal Strengths :
- Cost
- Price
- Varities
- local Design abilities
- earlier entry in India
Weakness:
- Culture Gap
- late entry to China

External Opportunities:
- huge Markets potentials
overseas
China CAGR: 13.87% in 2013
North America CAGR : +5%


Threats:
- Brandawareness overseas
- Unknown the markets
- Firce pricing rivals in emerging
markets
Value Proposition in global expansion
Markets entry
Low-end vehicles entry to foreign markets (price advantage)
max. usage the cost advantage ( value for money)
cut price to gain shars
middle- & high-end vehicles follow
trend

Technical
local design adaptations to local demands in culture diversity, government requirements, driving
habits, high tech requirments & poor utilizing conditions
strict quality control to improve the brandawarenes

Culture deiversity management
effective internal cummunication with partner and open to conflict

supply Chains
optimization the geografical and cultivation the suppliers

sales
Distribution system adaptation , incentive plan distributors






Hyundai in China
Market entry


Technology & brand granting
JVs in passenger cars & Engines
JVs in commercial vehicle
Hyundai in China
Market share aquisition and probelm solving
1979 Car market boom competition from big & local players
1999 Market entry with Jianghuai Qiche Technology granting Anhui
(terminated)
2000 with Rongcheng Huahai Qiche Technolgy & brand granting Shangdong
2002 JV passenger car , Sonata
Hyundai - BAIC = Beijing Hyundai HMC 50%, BAIC 16.38%, Capital Steel 33.62% Beijing
KIA - DFM KIA 50%, DFM 25%, Yueda 25% Jiangsu
2003 ISO 9001 & sales 50 000 Units
2004 100 000 sales of Elantra Elantra
(certified most ideal car for Chinese families)
2005 300 000 product line Tucson & NF Sonata
2006 start construction 2nd plant & ISO 14001 Accent
2007 100 000 Engine production Elantra Sports
Sonata sales reduction to Toyota Camry & Honda Accord because of lacking of the luxury image
Corporate + BJ Hyundai -> Varion Strategy - brand image by unique product identity & Attract & retain local experts

2008 1 Mio. sales & completion 2nd plant Elantra Yuedong
new China version Elantra ( fuel efficiency, Euro 4 Emission, appear more dynamic -> target younger customers)
2010 2 Mio. production line
2011 3 Mio. production line
2012 JV Sichuan Hyundai HMC 50%, Nanjun 50% Sichuan
Commercial Vehicle
T RAGO (Heavy Truck)
2013 R+D County (Bus)

Source: Beijing Hyundai & www.hyundai.com.cn

SWOT China
Internal Strenghths :
Cost, Price, Design
Adaptations,
Supply Chains ,
Distributions
Weakness:
Culture Gap
External Opportunities:
Markets potentials China
CAGR : 13.87% 2013
Threats:
Brandawareness
Unknown the markets
Culture Gap
Fierce rivals
Approch and Adaptation in China
Culture Adaption : initial car type in China & tailor made to China market
- outer appearance -> enhance the status of the owner
- promoted the plush interiors for the rear seats
- adjuested the structure and height -> local road conditions
- improve the fuel efficiency ( new China Elantra)
- Euro 4 Emission standards according to governement ( new China Elantra)
- apperance more dynamic -> target younger customers ( new China Elantra)
Supply Chains:
- cost reduction by optimising and cultivation the supply chains, eg. the technical and managerial training
Production: strict quality managment , also to subcontractors
Sales : distribution adapt the " 4S" dealers
- Geografical spreaded over China
- Criterion for selection the dealers: past experience, min. investiment, as well as the passion and determination
HR: attract high-quality human resources from USA and Europe -> expansion the R+D centre -> customizing for
local markets with latest technology
Reacts to competition
cohensive cooperation between head quarter with daughter companies
sales reduction in 2006 and 2007 to Toyota Camry & Honda Accord-> overlook the luxury image in China
- > realease new models continuously and establish an efficient distribution channel

Source : Case Study reading materials
Benchmark the China car makers 2013


Hyundai has overseeded the Toyota and Honda and came into Top 10 list
Source : CAAM reported on China daily
Recommendations China
Opportunities & Risk Opportunities :
- 24 Mio. vehicles are
expected to be sole in 2014
- CAGR : + 18%
- Ubanization process
- New energy vehicles are
encouraged by
governement ( 16% ttl.
vehicles, 5% Taxis)
- Japan players has no
solution to overcome the
current political issues
Riskes:
- Culture Gap
- Firce competitions lead
low margin operations
- technical gap from local
players becomes narrow
- Anti-corruption reduces
the overall comsumptions
Recommendations - Optimising the supply chains (Cost)
- further development the local R+ D, speedy the turnover
of new models, build the local competence (Tech)
- adaption the new trend with new energy vehicles for
enviromental protection esp. the polluted air ( Innovation)
- Brandawareness by online marketing & improving the
quality and after sales services (Marketing)
- Expansion 2nd tiers cities in west China (Sales)