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Hyundai Motor Company: Design Takes the Driver’s Seat




Dr. Kyung-Won Chung

Professor, Department of Industrial Design, KAIST, and President of Korea Institute of Design Management


Dr. Yu-Jin Kim

Associate Professor, Department of Visual Studies, Kongju National University, and Advisory Board Member of the Design Management Institute


Sue Bencuya

Editor, Design Management Institute



This case study recounts the surprising success story of an automobile company that rose out of a country with very little experience in that industry—and became one of the world's five leading car companies.



This case explores the history of Korea's Hyundai Motor Company and the part design management played in Hyundai's rapid rise to become one of the Big Five global car manufacturers. The company only began manufacturing automobiles in the mid-'60s and now commands two major brands (Hyundai and Kia) that have made significant inroads into European and American markets.



Two skyscrapers rise side by side near the entrance of the Gyeongbu Expressway, South Korea's Route Number 1, connecting Seoul, the country's capital, and Busan, the country's second-largest city and the one with the biggest port. The taller one is the headquarters of Hyundai Motor Company, and its shorter companion represents Kia Motors Company. They are owned by the same parent company, Hyundai Motor Group.


Route 1 is now the most heavily travelled expressway in Korea, but building it required some vision. In the mid-'60s, with South Korea still climbing painfully out of its postwar miseries, there were only about 100,000 cars registered in the country. With all the work that needed to be done, why did South Korea construct a new and expensive road? After all, there was already a railway line betwen Seoul and Busan. Moreover, the price of the construction represented easily 10 percent of the Korean national budget, and thus many people were opposed to the new expressway. Despite all this, then-president Park Chung- Hee pushed ahead with construction by mobilizing three army corps of construction engineers and 16 private construction companies, including Hyundai Engineering and Construction (the Hyundai Motor Group's precursor1), which undertook 40 percent of the construction work. Chung Ju-Yung, Hyundai's founder and first chairman, was a key player behind the construction, receiving direct orders from the president and helping see to it that the Gyeongbu Expressway was successfully completed in spite of Korea's undeveloped construction technology and mountainous terrain. The project helped to revitalize the Korean economy. It also accelerated the development of its automobile industry. Now, almost 40 years after the Gyeongbu Expressway's final segment was finished, there were more than 17,000 cars in South Korea, and nearly 80 percent of them were manufactured by Hyundai Motor Group. Chung Mong-Koo2 was now serving as chairman of the company.


In August 2009, Hyundai Motor Group appointed Chung Eui-Sun to the vicechairmanship. Chung had been working for Hyundai Motor Group since 1994 and had served as president of Kia Motors for four years. He held a bachelor's degree in business administration from Korea University and an MBA from San Francisco State University. Chung had done good things for Kia. Despite its robust technical capabilities, Kia had suffered in global competition, and Chung had seen, correctly, that this was because the company's products lacked a certain emotional appeal. His first act as Kia's new leader was to establish a designcentered corporate culture, and he hired Peter Schreyer, former chief designer for Audi and Volkswagen, as a vice president and the company's first chief design officer. Kia opened a design R&D center in Frankfurt in 2007 and a year later opened a second design studio in Irvine, California. The innovative design that took place under Chung's direction boosted record sales of the Forte Innovation, the Soul, the Sportage R, the K5, and others. In 2009, by the time Chung Eui-Sun left to become Hyundai's vice chairman, Kia's design management had gone beyond simple product design and was fast becoming part of the firm's overall strategy.


Chung's move from his old office to the new one in Hyundai headquarters spanned only a few hundred meters, but the change in his responsibilities was huge. He was now squarely in charge of sales and planning for Korea's largest automaker—and the fifth largest automaker in the world.


The cars on the Gyeongbu Expressway were flying now. Time would not stand still either in the ever-intensifying survival game known as the world automotive market. Could he bring his design management focus to the parent company?


For the month of July, the case will be available for free download.


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