Hyundai went from punchline to third-largest carmaker with a bold warranty
In the late 1980s, American comedians joked that Hyundai stood for Hope You Understand Nothing's Driveable And Inexpensive. The company's answer was to spend heavily on quality and then offer a ten-year, 100,000-mile powertrain warranty. By 2024 it was the world's third-largest carmaker by production, behind only Toyota and Volkswagen.
Chung Ju-yung, who had started a construction firm in 1947, set up Hyundai Motor with his brother Chung Se-yung in 1967, and its first car was a Ford Cortina built in partnership with Ford. To create a car of its own, Hyundai hired George Turnbull, formerly managing director of Austin Morris at British Leyland, in 1974, and he brought five senior British engineers with him. The result, in 1975, was the Pony, the first South Korean car, styled by Giorgetto Giugiaro's Italdesign with Mitsubishi mechanicals.
Exports started in Ecuador, then the Benelux countries and, from 1984, Canada, where the Pony at one point outsold every other car. It could not meet US emissions rules, so Hyundai entered the American market in February 1986 with the Excel, selling 168,882 in its first year, a record for any new brand. Then cost-cutting showed through. Reliability suffered, sales collapsed, and many dealers made more from repairs than new cars.
The recovery was deliberate. Hyundai built its own engine and transmission by 1991, took over rival Kia after the Asian financial crisis of 1998, and poured money into design, manufacturing and research, backed by that long warranty. By 2004 it tied Honda in J.D. Power's initial quality survey, second only to Toyota, and its Genesis sedan was named North American Car of the Year in 2009.
Today the company's plant in Ulsan, opened in 1968, is the largest integrated car factory in the world, spread over about 5,000,000 square metres, roughly 670 football pitches, with capacity for 1.52 million vehicles a year. Its cars are sold in 193 countries.
Source: Hyundai Motor Company
