Word: hyundai
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Dates: during 2000-2009
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...course, quality isn't everything. Chung has also ramped up efforts to ensure Hyundai is competitive with Japanese benchmarks in technology and styling. Hyundai's R&D budget has expanded 110% since 1999, to $1.6 billion this year. Hyundai invested $200 million to open or expand research-and-design centers in California, Michigan, and near Frankfurt, Germany; a $60 million proving ground in California's Mojave Desert opened in January. In South Korea, Chung expanded his R&D headquarters, adding a new design center last year complete with a 3-D cinema for viewing virtual models of new cars...
...Meanwhile, Hyundai has also needed to be innovative to woo reluctant customers back to its dealerships. In 1999, the company began offering a 10-year warranty, at the time the best in the industry, to rebuild confidence in its cars. And to compete with bigger brands, Hyundai has loaded up its models with special features that many of its rivals sell only as expensive extras. A 2006 Sonata for the U.S. market will come with six air bags (most competitors offer only four as the standard), a six-speaker CD and MP3 player, and an advanced antilock-braking system...
...With some of its biggest rivals in disarray, Hyundai sees an enticing opportunity to build on its progress overseas. Slammed by rising costs and slumping sales, General Motors recently shocked investors by predicting a first-quarter loss, and Ford followed this month by downgrading its 2005 profit forecast. Chung is determined to keep the pressure on. He's moving Hyundai's product line away from its traditional small cars into larger, higher-profit vehicles. In October, Hyundai unveiled a small sport-utility vehicle, the Tucson, and later this year, the company will launch a new high-end sedan...
...Even with its recent success, Hyundai's market position remains insecure. The next few months will be especially challenging. With a host of new models coming out and its U.S. plant just revving up, Hyundai may have a harder time maintaining quality. "They're not out of the woods yet," says J.D. Power's Parker. Dwindling profit margins are another problem. The average Hyundai car retails for 10-15% less than a comparable Toyota or Honda in the U.S., but with rising labor costs and a weaker dollar, Hyundai must persuade customers to pay more so that profits keep growing...
...After all, Hyundai's road trip is really just beginning. Despite its impressive winning streak, the company is still only the world's seventh largest carmaker, with 3.3 million vehicles sold globally?and that includes sales by its Kia subsidiary. But Chung has grand ambitions. "We will make ourselves an invincible competitor," he says. Hyundai's larger rivals should mark those words whenever they check their rearview mirrors for overtaking traffic...