It’s currently the fifth largest carmaker in the world and employs a staggering 10,000 engineers at its R&D centre in Nam Yang Korea, and that’s just the head count at one of many key divisions within the Hyundai Motor Group.
Over the last few days, we have also visited Hyundai Steel in Dangjin, the Asan car manufacturing plant – one of the world’s most automated, the proving grounds – where yet to be released models are put the ringers to expose any unforeseen problems, and Korea’s most successful Hyundai dealership near downtown Seoul. Oh, and we’ve had a quick steer in both the Equus and Genesis.
The steel mill alone is one of those ‘you have to see it to believe it’ sights, with a combination of cutting edge technology and a genuine concern for the environment, with significant and costly measures in place to protect the natural surroundings.
It must be working too, as there’s a fishing village next door to the plant, which also operates a daily fresh fish market. I doubt you will ever see a sight like that anywhere in the world – a fishing village and a steel mill happily co-existing side-by-side.
Hyundai doesn’t just talk the talk, this is a company that still has as lot to prove to the world and seems so hell bent on producing the best automotive product in the world, that I would suggest all other carmakers are well and truly in its sights, regardless of their market share or size.
In fact, by the time I finish writing this piece from my hotel room, overlooking one of the largest cities in the world (population 24 million), this automotive super brand, which Frank Ahrens, Hyundai’s Global head of PR, says “still feels like a start up” due to such overwhelming enthusiasm infecting each and every employee, may well have been crowned the fourth largest builder of cars on the planet, edging out the US icon, Ford.
Wonhong Cho, Executive Vice President (Chief Marketing Officer) Hyundai said, “In this economic crisis…we never stopped transferring our operations to meet consumer needs in key local markets. This effort is appealing to our consumers.”
Hyundai bosses were modest when they told a small group of visiting Australian motoring journalists this week, that Hyundai is on target to sell a staggering 3.6 million cars this year, representing a 16 percent increase over the previous year. They also forecast another 8 percent growth in 2011 and my feeling is, that this is a conservative number.
It’s no surprise then that Hyundai has been rising steadily in the brand value stakes and in 2009, in a joint study by Interbrand and Business week, the Korean carmaker was the ranked the 65th most valuable brand in the world, with a value of over US$5 billion.
Not only has Hyundai’s brand value increased by over 9 percent in one year, it trails Audi by only two positions and that puts it well ahead of Ferrari, Porsche and even Shell.
Hyundai also topped the rankings in 2009 in the US based J.D. Power’s ‘Initial Quality Survey’ with the unusually high score of 95 points, and the highest score in history for the general brand category. Honda came home in second placed and Toyota was third.
Hyundai-Kia Motors holds an unprecedented 75 percent market share in the domestic market and as a result, continues to expand it’s manufacturing facilities around the globe, with plants in the United States, India, China, Russia, The Czech Republic and Turkey – for now.
It’s the only car manufacturer in the world that has it’s own steel works, so that they can control the quality and consistency of the steel components for each and every car the company builds.
It represents a US$ 6.2 billion investment, which has already started to pay off. This particular hot-coil steel produced by Hyundai Steel, is the best auto-grade steel money can buy, and it’s a precious metal that many other car companies would dearly like to get their hands on. The only problem being, Hyundai isn’t selling – at least not to other carmakers.
That’s not the half of it either. They have their own shipping port on the edge of the steel mill to facilitate the unloading of Australia iron ore from the likes of BHP Billiton and Rio Tinto. That said don’t expect to see a single piece of coal or a spec of red dust, anywhere in sight.
It sounds extreme, but other less innovative steel works can lose up to 6 percent of coal and iron ore, due to the likes of wind and rain.
The raw material is moved about under the ground on a network of over sixty-kilometres of conveyer belts and stored in massive dome-shaped buildings, which prevents wastage and leakage through wind and storms that can cause up to 7% loss of the product. The process also eliminates the need for heavy carting trucks on site.
The steel mill is almost completely automated and can produce a mind-blowing 10,000 tonnes of hot-coil steel every day. Each roll of hot-coil steel starts out as a 10-metre slab of steel, weighing 20-tonne. After it passes through a series of super hot pressings and other processes, that 10-metre slab comes out in the form of a 2-kilometre coil, which has gone from 250mm thick down to a thickness of just 1.2 millimetres and yes, I’ve exhausted my list of superlatives.
From just one of these coils, and there are hundreds, if not, thousands under one storage facility, Hyundai can produce 20 new cars. Mind blowing, I know.
The beauty of producing high quality high tensile steel of this grade is that it’s light – light enough to also produce vital parts of the chassis such as the engine and transmission cradle, cross members, shock absorbers, springs, drive shafts and Brake rotors.
It’s getting lighter too. Phil Koo, Head of Project Planning for Hyundai Steel was quick to point out that each year, the plant is able to reduce the weight of the steel components as cars tend to become larger and are fitted with more and more standard equipment, which of course adds unwanted weight. For example, the engine cradle has been reduced by some 9- kilograms in the last year alone and is in fact stronger than the previous unit. These are exactly the kind of advancements that the retail customer will never here about, but are what makes this company stand out in a crowded market.
It gets better too at the Asan car manufacturing plant, which may as well be called Robot City, as this is a 90 percent automated plant, and similar to Hyundai Steel, the only job for human beings is to maintain the machines and computers on a 24/7 basis and fit the interior. The robots do the rest.
It’s hard to imagine that the coils of steel we saw yesterday are presently being cut into perfectly measured sheets and pressed into door, bonnet or any number of body panels for the latest i45 sedan or Sonata, as it is known as in Korea and the United States.
After watching the robots in action, as they laser weld over 6000 spots on each car, it comes as no surprise why Hyundai have been able to offer extended warranties as standard practice for some time now. You can barely see the weld; such is the precision, while the join is stronger than the uncut sheet metal.
With such precision when it comes to the positioning of metal and glass panels, you wonder as to how on earth the car companies that predated robotic assembly lines ever managed consistency in their cars.
It’s about speed too and the Asan plant can precision build up to 1200 cars each day, provided the computers behave themselves and the 1000 trucks that deliver to the plant each day are on time. The Asan factory runs on a ‘Just in time’ model, hence stratospheric number of deliveries each day.
Unfortunately, we didn’t get to see the paint shop in action, as that is the sole domain of 60 robots, which spray the cars in a process that takes 11 hours per car. Thankfully, the paint used by the shop is water based.
Our next report will be from the largest Hyundai Motor dealership in the well-to-do suburb of Daechi in Seoul, who in 2009, shifted 1306 cars or an average of 109 each month.