April will be a landmark month for the global success of Hyundai Motor Group as its cumulative global sales is poised to surpass 100 million units.
The Korean automotive giant said Monday that the combined global sales of its two automakers -- Hyundai Motor and Kia Motors -- reached 99.7 million units in March, and is expected to cross the 100-million mark this month.
“Few automakers in the world have achieved such a sales record in the global market,’’ said Kim Pil-soo, an automotive engineering professor at Daelim University.
Global sales have become the most important pillar for growth at Hyundai Motor Group. The ratio of overseas sales to the auto giant’s entire annual sales amounted to about 70 percent last year.
“Further, Hyundai will be the fastest automaker to reach this milestone,” the professor added.
It has taken only 40 years for the Korean automotive group to achieve its global success in sales. The company’s car export saga started in 1976 when its bigger auto arm Hyundai exported six units of its first model Pony to Ecuador in exchange for bananas. In the 1980s, the company penetrated the U.S. and European markets. In 1986, Hyundai launched its Excel compact cars in the U.S.
The automaker’s reputation initially suffered due to poor product quality until it drove a quality push in the 2000s.
Since the automaker was rebranded Hyundai Motor Group in 2000 following Hyundai’s takeover of Kia in 1999, its global business expansion has accelerated at a fast pace. The automotive group became the world‘s fifth largest automaker in terms of sales in 2008, pushing Honda to sixth place.
“Unquestionably, the strong and charismatic leadership of group chairman Chung Mong-koo is the key factor for the global success of Hyundai and Kia,” the professor said.
The 78-year-old chairman, the eldest surviving son of Hyundai Group founder Chung Ju-yung, launched the quality management initiative in 2000, setting the bar high with a 10-year, 100,000-mile (161,000 kilometers) warranty in key overseas markets, including the U.S.
“His firm and fast drive to expand production lines overseas was another factor that helped Hyundai and Kia react to the local demands faster than other emerging auto brands,” Kim said.
The recent prolonged global downturn, however, put the brakes on the decadelong growth momentum of the two auto units in overseas markets last year.
The automotive group maintained its global status in sales, with its two auto units selling a total of 8.03 million cars last year. But on-year global sales of Hyundai Motor fell 0.6 percent to 4,250,716 units.
Hyundai Motor Group expects a pickup in its global sales this year, projecting exports of Hyundai and Kia to grow 0.9 percent and 2.3 percent, respectively, over a year ago.
“Hyundai Motor Group, however, cannot go back to the boom time in global sales as global consumers are shunning small cars in an era of low oil price. Compact cars have taken the largest portion in Hyundai and Kia’s global sales,” said Kim Jin-woo, a stock analyst from Korea Investment & Securities.
This is a key reason the Korean automaker has made efforts to diversify its product portfolio, strengthening the luxury and green car segments.
“Hyundai is also challenged by fiercer global competition for future cars, including driverless and eco-cars. The automaker must step up its efforts to catch up with the global trends to become a bigger global player,” Kim said.
By Seo Jee-yeon (
jyseo@heraldcorp.com)