On February 26, CNBC, a renowned American broadcast news, posted a video coverage titled “How Hyundai Became the Third Largest Automaker In The World” to its YouTube channel, which has over 3.3 million subscribers. The coverage garnered over 650,000 views in just three days, indicating significant interest for Hyundai Motor Group from American viewers.
The video, lasting 15 minutes and 22 seconds, is divided into four chapters: A formidable competitor, A bleaker past, transformation, and outlook & challenges. It provides an in‒depth analysis of the Group's recent growth and reasons why. The video explained how Hyundai is closing the gap in the electric vehicle (EV) market with leaders like Tesla, and investing in areas such as robotics, autonomous driving, and flying taxis.
“The Hyundai that we see today, especially from an American perspective, would surprise people if they remember the Hyundai that first entered the American automobile market years ago,” said William Barnett, a professor at the Stanford Graduate School of Business. He explained Hyundai's rapid growth, highlighting the company's transformation since its initial entry into the U.S. market. The CNBC video on Hyundai Motor Group's growth into the world's third‒largest automaker in 2023 delves into several key factors and strategies that contributed to its success. Here's a breakdown by chapter:
In the first chapter of the video, Hyundai Motor Group’s recent accomplishments in the US are introduced. Last year, Hyundai achieved record sales in the U.S., selling 1,652,821 units, a 12.1% increase from 2022, surpassing its previous sales records and highest since entering the U.S. market. As a result, Hyundai Motor Group overtook Stellantis, composed of U.S. brands, and secured the fourth position in U.S. automotive industry sales, following GM, Toyota, and Ford.
Additionally, in January of this year, Hyundai recorded EV sales that surpassed those of GM, Toyota, and Ford. This achievement is particularly noteworthy given the limitations imposed by the U.S. federal government's Inflation Reduction Act (IRA) on tax benefits for Hyundai's electric vehicles.
CNBC attributes the Group's strong performance in the electric vehicle sector to the advanced technology of its dedicated EV platform, E‒GMP (Electric‒Global Modular Platform). E‒GMP's modular design offers scalability to accommodate various vehicle types and has been widely applied across Hyundai's EV lineup. The platform is equipped with innovative technologies, such as a 400V/800V multi‒fast charging system and Vehicle‒to‒Load (V2L) capability. Hyundai's EVs have drawn significant attention for their ability to operate and charge without issues, even during a severe cold wave in the U.S., where temperatures dropped below ‒30°C, causing many EVs to discharge. This resilience is credited to Hyundai's innovative battery heating technology.
The CNBC video features comments from various automotive industry experts who support Hyundai's competitive technological capabilities in the EV sector. Sam Abuelsamid, an analyst from Guidehouse Insights, noted, “They’re generally widely considered some of the most advanced vehicles, especially their electric vehicles. The E‒GMP platform and some of the stuff that’s coming in the next few years are considered some of the best EVs on the market.”
Ed Kim, Senior Analyst at Autopacific, singled out the Hyundai IONIQ 5, an E‒GMP‒based model, for particular praise. “In a bit of historical irony, Hyundai IONIQ 5, by basically everyone’s standards, is a far superior product to Toyota’s comparable competitor, which would be the bZ4X.”
The second chapter explored the early days of Hyundai Motor Group in the U.S. market. The story traces back to 1986 when Hyundai first introduced the Excel in the United States. The Excel was the successor to Hyundai’s first independently developed model, the Pony, and was designed once again by Giorgetto Giugiaro, embodying a modern design in a front‒wheel‒drive compact car. CNBC commented that the Excel model successfully established itself in the U.S. market based on the reliability and excellent value for money that Asian brands, particularly Japanese car brands, had built up in the U.S. Notably, the Excel exceeded sales of 100,000 units within just seven months of its U.S. market debut, totaling 168,882 units sold in a year, which propelled Hyundai’s growth momentum.
However, about a decade after entering the U.S., around 1998, Hyundai faced criticism for not matching the quality of Japanese brands, which led to a decline in its growth trajectory. CNBC mentioned, however, that Hyundai made significant efforts to improve quality, involving everyone from top executives to frontline production workers. At that time, Hyundai’s then‒Chairman, Mong‒Koo Chung, emphasized a ‘Fast Follower’ strategy that adopted best practices from leading Japanese brands like Toyota and Honda.
The third chapter of the CNBC video dives into how Hyundai Motor Group implemented the Fast Follower strategy. Hyundai spared no effort in improving quality, establishing automated factory systems, and meticulously addressing and rectifying quality defects. As a result, by the 2000s, Hyundai had achieved quality levels on par with those of Japanese and American brands.
Moreover, Hyundai introduced a 10‒year/100,000‒mile powertrain warranty program in the U.S. that shocked the industry, a bold move that could only be made with confidence in their improved quality. This initiative was a groundbreaking way for Hyundai to regain consumer trust and express confidence in their enhanced quality. Consequently, American consumers began to reevaluate Hyundai’s quality.
“Then they designed a lot of automation at the end of the assembly line to do quality checks. They were keeping good records on quality defects, which let them diagnose stuff,” said John Paul MacDuffle, a professor at the Wharton School of the University of Pennsylvania, about Hyundai’s quality improvement strategy.
As Muwon Lee, a professor at the School of Business at Yonsei University, says, “In early 2000, actually, their quality level became very comparable to US big three cars and the Japanese cars, even though their brand value was still lower than their competitors.”
The next step was to put its money behind its new claim by launching a Ten‒year, 100,000‒mile powertrain warranty. "It was a real headline grabber,” said Ed Kim. “It certainly helped communicate to consumers, to American consumers, that Hyundai was actually serious about quality.”
The final chapter discusses the recent challenges faced by Hyundai Motor Group and how they are addressing them, as well as their preparations for a better future. Among the issues highlighted by CNBC were the massive recalls in the U.S. due to fire risks involving millions of vehicles and car theft crimes popularized on social media. Genesis, Hyundai’s venture into the premium brand sector, initially struggled due to a sedan‒centric model lineup.
CNBC emphasized Hyundai’s swift response to these challenges. The group invested hundreds of millions of dollars in engine software updates and quality improvements. In addition to implementing anti‒theft software for customers visiting dealerships, Hyundai has set up dedicated spaces and staff to proactively address vehicle theft, successfully restoring consumer trust. As a result, car theft crimes involving Hyundai vehicles are rapidly decreasing across the U.S. Genesis has accelerated its growth in the U.S. by expanding its electric vehicle and SUV lineups.
Hyundai is also diligently preparing for the future. One area of focus highlighted by CNBC is hydrogen fuel cell technology. Hyundai is the only company that is consistently developing hydrogen fuel cell technology across various segments, from passenger cars to commercial vehicles and high‒performance vehicles, with models like Nexo, Xcient Fuel Cell, and the N Vision 74 concept. At the 2024 CES, the world’s largest consumer electronics show, Hyundai introduced the HTWO Grid, a hydrogen value chain solution that utilizes the group’s technology in all aspects of hydrogen energy, from production to storage, transportation, and utilization.
But that’s not all. CNBC praised Hyundai for its continued pursuit of challenges and innovation, such as developing autonomous driving technology through Motional, a joint venture with Aptiv, and collaborating with Amazon, the world’s largest retailer, to venture into online vehicle sales. Hyundai Motor Group Innovation Center in Singapore (HMGICS) is noted for various innovations stemming from its highly automated design and cell‒based production system. As the video says, Hyundai Motor Group, quick to adapt to change, is pioneering the automotive industry as a leader.
“Some people criticize Hyundai Motor Company because those areas are too much advanced. Each of those areas has high level of uncertainty. They don’t imitate Tesla, Toyota, or US companies, because in this new industry, in this new game board, there is no leader, which is totally different from the past industry,” says Professor Muwon Lee.
As CNBC’s analysis shows, Hyundai has consistently strived to improve quality and enhance product value by listening to consumers. As a result, Hyundai, which first jumped to the world’s third‒largest automaker in 2022, has successfully maintained its position for two consecutive years. Last year, Hyundai, Kia, and Genesis combined sold approximately 7.34 million units, securing their position as one of the global top 3, following Toyota (approximately 11.23 million units) and Volkswagen (approximately 9.24 million units), and significantly ahead of the fourth‒placed Renault‒Nissan‒Mitsubishi Alliance (approximately 6.399 million units).
The video, released on February 26, has garnered about 650,000 views and approximately 1,400 viewer comments as of February 29. Examining the most agreed‒upon comments among viewers gives an insight into how American consumers currently see Hyundai Motor Group.
The comments include: "They changed their face quickly and also improved their quality. Respect that.” “Hyundai group has come a long way. Koreans never give up.” "Owner Hyundai cars for 13 years now and seeing the growth is one thing but experiencing it first hand is another. One of the few manufacturers that knows what people want, and absolutely loads their cars with features for the value.” "What I like about this cars is how straightforward the driving experience is and lot of features than competitors.” “They did it the old‒fashioned way. They earned it.” "I think Hyundai’s commitment to trying unconventional or new techniques/innovations is a huge part of its success.”
Hyundai Motor Group is known for its ability to accept reality and identify problems, and then take swift action to make improvements. The team spirit of all the members of the Group is what drives them forward, and their passion for discovering new opportunities and innovating has been a strength they have developed over time. As long as Hyundai remains committed to advancing towards the future, their progress, as noted by CNBC, is likely to continue.
HMG Journal Operation Team
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