Chairman Chung Mong-koo of the Hyundai Motor Group stresses his points at a 

recent management strategy meeting of the group’s leading executives at the group’s 

headquarters in southern Seoul.

Chairman Chung Mong-koo of Hyundai Motor Group announced the “Leading Management” to make the group a first mover, not fast follower in the global auto industry.

Chung announced the strategy at a management strategy meeting at the group’s head office in southern Seoul, saying that both Hyundai and Kia have been fast followers in the competitive global auto market with a fantastic result, but from now on, the two automakers will focus on reform based on a growth strategy to be a leader in the global auto market and consolidate their positions.

“The next five years will be a critical period, with the two automakers’ futures hanging in the balance, as it will determine whether they might able to maintain their stable growth. The most important factor is to secure the lead in technology development,” the chairman said.

His call for the new management strategy to turn the group’s management around to be a leader in the global auto industry is based on the fear that the group will remain a follower if they continue to depend on the “fast follower” strategy with no chances to move up to a leadership position in the global auto industry.

Chung became the chairman of Hyundai Motor Group in March 1999, and last month marked his 15th anniversary at the helm of the group.

The group became independent from Hyundai Group in 1999 with 16 affiliates based on the Fair Trade Commission’s record, and now it has grown to own 57 affiliates, while its total assets have climbed to 180 trillion won from 36 trillion won.

The group’s annual sales revenue ballooned to 159 trillion won last year from just 36 trillion won in 2000, an increase of 336 percent.

Last year, both Hyundai and Kia turned out a combined 7.56 million cars to rank 5th in the global auto industry, but their share of the global market stayed stagnant over the past two years at 8.8 percent, while their share of the domestic car market has been hurt with the expansion of foreign automakers’ share of the car market in Korea to over 10 percent.

Chung has no choice but to drastically change his management strategy in order to keep the group out of stagnancy.

Professor of Management Lee Yu-jae of Seoul National University, an outside director of the auto group, said the chairman often warned that the two automakers are in crisis, and have to boost their technology to improve their cars’ quality, marketing, and service to a global level.

Chung also stressed tight management so that the group will be able to cope with any tough situations by displaying its capacity to overcome any difficult problems. All officers and staff of the group should collectively work toward tightening internal management of the group such as R&D, production, marketing, and outside activities in an effort to boost sales revenues at the same time.

Chung is encouraged by the completion of the project to make Hyundai Steel, an integrated steel plant, which gives him more confidence that the carmakers can compete better in the global market with its diametric production system from steel, parts, and complete cars to logistics and finance, and can compete head-to-head with such global car makers as Toyota and GM.

In fact, the Genesis and the Sonata, the two main car models of Hyundai Motor have been produced using over 50 percent of the steel needed from Hyundai Steel.

Both Hyundai and Kia signaled that they are major competitors in the U.S. car market with the announcement of its marketing strategy calling for free after service for their cars for 10 years and 100,000 miles, Chung said. It was a momentous marketing move for the carmakers who annual production came to just 2.13 million cars in 1999, ranking 11th in the global car industry. In 2000, the chairman, in his New Year’s speech, unveiled the new vision for the automakers to shoot for the global top five ranking in the near future.