The Korean Killer: How Hyundai captured the West

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In December of this year (2017), the Hyundai motor corporation will be blowing 50 candles from its cake, an absolutely coffee-spitting achievement when you think they now have an empire that stands as the 4th largest automotive business in the world.
So how did a company from Seoul do it? well heres my very abridged view on how Hyundai managed to win the wallets and occasionally the hearts of western motorists.

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In the beginning:

‘Shi-bal’ in Korean modern slang means sh*t , dangerously close to the word ‘Sibal’ which means inception or ‘to begin’, making sibal the perfect name for the first car made on Korean soil.


The Sibal’s origin shares a lot with Lamborghini’s (no I’m not joking). Well, more the farm equipment than the Miura. But, you see, much like how Ferrucio at the end of the Second World War scavenged parts of tanks to make tractors, three enterprising Korean brothers “borrowed” much of the military leftovers from the Korean war to build useful peace time equipment.
But alas, agriculture was not on the minds of these enterprising businessmen: they had much more noble dreams in mind. Cars.

The design obviously owed much to the GI driven Willys Jeeps, but to be fair when thats the only car seen for some time on the peninsula then where else can you draw inspiration?
The Sibal was years ahead of the pack in the recycling game, bodies were even produced by rolling out old oil barrels that were lying around, which is perhaps why it is believed that zero of these cars are left in fully working order today.
But don’t let this make you believe Koreas first car was sh*t, because it was not a bad first try, not by a long shot.  Sure, the quality was not up to the standards of a Rolls Royce or even a Triumph Mayflower but the car was rugged and dependable which meant it worked well on the country’s rough unpaved surroundings and taxi drivers soon took to them. No, the Sibal’s failure lay with America.

Time for growth:


(Seoul 2017 vs 1953)

America and smart international decisions are not words often seen in the same sentence, so it was to no surprise that the Yanks did not put much care into deciding who should lead South Korea once the parallel was drawn in 1953.
They basically picked the only guy they knew, a toss pot/Despot by the name Synghman Rhee, who for all intents and purposes was an American. Rhee checked Macarthur’s stringent demands of a leader by being staunchly anti communist and that was (ahem) it.

While being anti communist, he was also unfortunately anti democratic and dead set against mobility of the people, which is not ideal for a motoring upstart. Protesters would often go missing, political rivals had the annoying habit of waking up dead and everything was so manic and crazy that there was no time left to build up an industry that was so demanding of infrastructure and resources.

Things changed when the South Koreans grew too tired of Third World conditions. In 1960 an uprising of the people finally led to the Americans quietly sneaking Rhee out of the country by plane to end his days in exile on a beach in Hawaii, the poor soul.

Things, however, got better when Park Chung-hee came along two guys later. Park, like Rhee, was also a controversial authoritarian, but in a more constructive way. His new government wanted prosperity and  industry for the country.
South Korea desperately needed an auto industry as the swinging sixties were all about the motorcar everywhere in the world bar Korea, and not only were cars profitable but they were also a sign of progress and the upper classes.

To tempt budding companies to take on what would be a massive gamble, protectionism was in order to lower the risk. So, foreign imports on cars were banned outright but as there was little technical skill in the relatively new country, auto parts could be imported completely duty free. This led to Hyundai’s future stablemate Kia producing some of the best cars of the 20th century. It’s just a shame none of them were their own.

Yep, Kia’s Saloon range in the late eighties consisted of both the Peugeot 604 and the Fiat 132. It was the only way for foreign companies to enter a new market, so collaboration was common. Cars would be shipped over in kit form from the west to be assembled in Korea. Hyundai, who began as a construction company 20 years prior, managed to forge an allegiance with Ford in 1968, starting what would become a humungous automotive empire with the trusty Cortina.


The Pony Car:

Hyundai motors were aspirational from an early stage. They decided if they were to grow they could not build Fords forever. No, they needed to produce a proper Korean car that Korean people would buy and perhaps one that would appeal to the rest of the world as well. So they soon set about work on a new model, the Pony (popular misconception has it that they wanted a name similar to fords popular Mustang). Problem was they didn’t know where to begin, so some poaching of great industry minds was in order.

Now, the plan on paper should have ended in disaster: the team mainly consisted of ex British Leyland guys most notably George Turnbull, who had recently spent some time getting the Morris Marina “ready” for market.

The Midlands team, however, worked their magic in Seoul by basically taking the Marina and building it again properly. The project was a recipe for failure but Hyundai’s weakness became its greatest strength. There was no way Hyundai had the ability to develop its own mechanicals, so much of the parts were bought in. This meant the Pony did without the Marinas ageing running gear, opting for a rugged Mitsubishi engine, and the drive/suspension was pure Cortina which Hyundai had already had cut its teeth on. The factory was all new with no compromise (unlike the ageing pre war plants BL were surviving on), the press shop was already the most advanced in the world before any car even left the line.

Styling was seen as a high priority, and money wasn’t a problem so the team drafted in Supercar designer Giugario to pen the car, much like the contemporary Mk1 Golf. This made the Pony ironically the only Marina based design to actually be penned by Ital Design (unlike the woeful Morris Ital).

Turnbull and his engineering team had no Leyland Bureaucracy to deal with. Changes happened in almost an instant and when the chairmen of Hyundai tested the first production batch and found the rear legroom to be inadequate, the car was redesigned in no time at all. This was no small feat as finished ponies were already leaving the factory gates, something completely unheard of outside of product recalls. Turnbull also learned from Leyland’s many mistakes with the Marina, panel gaps were no longer canyon sized, the suspension could tackle some of the worst roads imaginable and best of all there was none of the Oxford workforce sickness in Korea. The poor workers happily grafted at -7 degree conditions in an unheated factory over the winter of 1975, not once showing any sign of complaint. Oh, and they also worked for peanuts meaning the cars could significantly undercut competition. So the Pony became Korea’s first motor export.

Wonder how many other companies celebrated the launch of a new car through karaoke?

 

Governmental Interference:

One troublesome similarity with Britain came to light in the Eighties: a car buying slump in Korea meant the Government who had done so much to set up the motor industry decided it also knew best how to tackle the problem. The plan was simple and foolish, the producers needed to be rationalised meaning Kia and Asian motors were to now to focus on small commercial vehicles and Hyundai and Daewoo were told to focus on passenger cars.

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an off day for Guigiaro?

This kind of meddling was good for Hyundai in a sense, as it meant they only had competition with Daewoo who were mainly owned by General Motors, Ford’s main rival.
In the 80’s Ford were still a large part in Hyundai’s car operation. The strong seller ‘Stella’ became popular with cabbies as it was basically a re-skinned Mk 5 Cortina. But what was good for Hyundai was not very good for future partner Kia, who now had little control over what they wanted to build. By 1987 the “Automobile Industry Rationalization Plan” was cancelled, having not really achieved anything but stunting competition within Korean manufacturing. Ah well.

The Korean you always promised yourself:

Hyundai did well selling rugged cars at a good price for years, but the range was too sparse to actually be a big player. Brand image also left alot to be desired.  Hyundai needed to shake things up in the Nineties and build a car that younger buyers lusted after if they wanted to start off the new decade in a strong position.

The S-Coupe was basically a Mk3 pony that was given some, if not too much, coupe sparkle. It was an idea that Hyundai played around with since the introduction of the Pony in the 70’s; the 90’s proved a better climate for the idea which also probably mixed well with the improved mechanicals of the time. While the first attempt wasn’t bad, it never really gathered too much interest in the West in initial form, where competition was too strong.

What could have been in 1974

Things began to change in 1993 however, when the S-Coupe gained Hyundai’s own engine with the option of a Garett turbo charger of a new advanced design. Suspension was tuned by Lotus on some models and the car gained a lot of respect (well, for a Korean made car in the early Nineties).

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MMMMMMMMMM

When it was time to replace the S-Coupe, Hyundai wisely dropped the confusing S from the badge (Americans called it the “scoop”, nasty people called it the “poop scoop”) and so the Coupe was born.
The first Coupe was standard 90’s fair, quite dull by today’s styling standards, although Mclaren F1 stylist Peter Stevens did come up with a more satisfying bodykit and alloys combo for the F2 evolution special edition. Under the skin, the Coupe was much less dull, Porsche now had some part in the suspension development and a new 2 litre engine made the 0-60 sprint come up in a market-competitive 8 seconds. The car impressed much of the motoring press with it’s good ride and handling compromise, which mixed well with the new found lusty performance and most of all its bargain basement price. Hyundai capitalised further on this success when the car evolved into the much more stylish Mk2 coupe, a car which from a distance some mistook for a Ferrari 456! Apparently.

Quite the evolution

The Coupe in Europe at least gave Hyundai some desperately needed street cred, and with cars like the Corrado ending production by 1995, and Fiats own coupe by 2000, Hyundai had the budget Coupe market all to themselves until the car bowed out quietly in 2009.

Hello Kia:

Kia in the 90’s however were having a bit of a shaky time with their unpopular range. The Mazda derived pride was already old when Kia started exporting it to the uk in 1991, and for some inexplicable reason they also believed they could succeed where Lotus failed.

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What were they thinking?

Yes, Kia bought the design and manufacture rights to the extremely underrated, extremely unsellable and extremely  expensive-to-build M100 Elan.  So it was to no surprise that by 1998 Kia hit bankruptcy.
The company, however, did make one smart decision: they started building SUV’s out of Mazda componentry,  this no doubt appealed to Hyundai when they bought the majority share in Kia. Hyundai had yet to join this extremely competitive market sector, and they knew that was where the future lay.

Big in America:

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Hyundai’s new Suv the Santa-Fe was everything that American buyers wanted when it hit the market in 2000, the new car was big, imposing, capable and best of all cheap. The car was pure fast food on wheels, so popular Hyundai struggled to keep up with initial demand in the states. This did not make Hyundai complacent however. No, they paid close attention to both dealers and customers, looking for ways to improve on the success of the car throughout its production run. This car finally made Hyundai a real contender in the states.
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In 2002 Hyundai became even more popular Stateside when they started building a state of the art Factory in Alabama. The company took people who were unskilled and, crucially, non-unionised. Bizarrely, most of these new staff came from local Fast food joints (they believed the pressure and need to adapt was found in both industries). These workers were paid slightly less than their Detroit counterparts but still a whole lot more than at KFC so the spaces did not take long to fill. This made a happy but cheap workforce on western soil. Hyundai also were not burdened yet like the Big Three by past worker pensions. They were upfront about how they did not want to make the same mistakes made by the established American automotive monster. Oh, the power of hindsight.
This factory also wisely took on Korean practises. Car production could change within 24 hours to meet live demands on models, something that other companies could not compete with at the time.

What auto crisis?

In 2008 America was hit by its biggest auto crisis for decades, Brands and models were dropping like flies. Hyundai, however, were going from strength to strength. The same year the crisis hit they released their first Rear wheel drive sports coup, the Genesis Coupe. This was an odd move, as the few Americans that were buying new cars were moving into smaller more frugal models. But as GM was slashing marketing budgets, Hyundai was happy to spend money.
In 2008 GM ended its long run of Superbowl commercials, which Hyundai soon took over, doing the same with the televised Oscars. This made Hyundai look strong and GM look weak. Their campaigning was so well targeted, that in 2009 they beat both McDonalds and Amazon to become marketer of the year. Not a small feat in such a patriotic nation!
Hyundai also implemented crazy warranties; in the US all models had 10 year 100,000 mile warranties, which the competition could not get anywhere near. Hyundai also had JD power satisfaction scores other companies could only dream about. The company even promised to buy back all Sonata models from people who lost their Jobs due to the recession, which took away most of the risk associated with buying a new car.

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Buying a Hyundai in the recession made sense, they treated customers fairly and saw opportunity when everyone else hid away to cut losses. ABC news even ran a piece on how the Korean giant was the auto industry’s ‘Cinderella Story’ in the US.

Back to Britain:

Sadly here in the UK we never got the fire-breathing Genesis Coupe (we did get the slightly disappointing Veloster coupe). But you couldn’t say our range was small, it was just a bit more sober. Hyundai, by the end of the Noughties, had nearly every market filled, with capable cars like the C “apostrophe” D. The models were at least as good as  most of the European and Japanese equivalents, and usually a fair bit cheaper.
One market the company had shied away from however was the Hot Hatch market, which was not a huge surprise due to Western brands having histories going all the way back to the 1970’s (the first Golf GTI was unveiled only 8 years after Hyundai motors was founded).

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In 2012 this all changed, with Kia leaking images of what was to be the first Korean GTI. The Pro-Ceed GT.
Unfortunately when the Pro-Ceed and Ceed GT hit the market one year later, it was received as more a ‘Tepidhatch’ than Hothatch by the motoring press. This should have been the end of the story and Hyundai/Kia could have written the whole thing down to simple misjudgement, but the story wasn’t over. No, Hyundai took a leaf out of their own history book and like with the Pony, they bought in new talent. A big name from one of the biggest names in the business, BMW.
Albert Bierman was working contently leading the world famous ‘M’ division in Munich up until April 2015 when he made the inexplicable move to Hyundai, to lead their new naughtily named ‘N’ skunkworks division.
You can only imagine package offered to tempt somebody to stop building some of the best Supercar killers in the world and trade sauerkraut for kimchi in order to focus on building go faster Korean shopping trollies.
But if early test reports on the i30 ‘N’ are anything to go by, it seems they might be onto a winner. This is odd thinking from the Koreans, who also happen to be building through Kia, a performance rear drive Gran Coupe. The stinger is a far cry from the days of the pride. In a world where crossovers are king, you would think neither Kia or Hyundai would need to move into these seemingly dying markets, but hopefully they know something that industry experts don’t.

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Hows the paypacket?

Also in 2012 after a nine year hiatus, Hyundai made the move to return to the world rally championship setting up Hyundai Motorsport Gmbh. In the same year the i20 coupe WRC premiered at the paris autoshow. The car was finally ready for the 2014 championship season. This was another strange decision on Hyundais part as the hey day of rallying was well and truely over by 2008 when both Mitsubishi and Subaru called time on dirt racing,much like most other manufacturer backed teams. But this of course would not be the first time the company decided to move away from the Automotive status quo.

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Hyundai also seems to go against conventional thinking in the Green car world. While the rest of the car world is enjoying its love affair with electric and Tesla, the Koreans appear to be more focused on Hydrogen, with cars actually on the street being driven by normal people as we speak. This, in my opinion, is the way I would prefer the industry to go.

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That’s not to say the electric route is closed, as Hyundai do now make the Ioniq hybrid which isn’t a car which will set the world alight, but at least it is nowhere near as ugly as the new Prius and they do also intend to build their own model 3 rival.

Soon Hyundai/Kia will have a car for every sector, not bad for a company which started with just the one model. Now the unheated factory is also a thing of the past, with Hyundai basically having their own city devoted to car and ship production in Ulsan. Home to the worlds largest single automotive factory. Mad.

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Who knows what the next 50 years have in store for the company, but if the growth and ambition is anything like the past 50 then they are definitely a company to watch.

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Rumour has it they now want to take the premium market by storm. You cant say they’re not an ambitious bunch.

Jack Wood

 

 

 

 

 

 

 

 

 

 

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