| The Hyundai Automotive Group is currently
the world's seventh-biggest carmaker in terms of units produced, but it
wants to be number five by 2010, by which time this agglomeration of Hyundai
and Kia is predicting an annual output of 5.7 million cars across worldwide
factories, with 3.8 million for Hyundai and 1.9 million for Kia. However,
if the Korean carmaker is to be number five, it must overtake two of the
three combines that lie immediately ahead: PSA Peugeot Citroën, DaimlerChrysler
and the Volkswagen Group, but how can it do that, asks John Simister.
Hyundai will not be by selling massively more cars in Korea, because along
with Kia (It acquired Kia in 1998) it already has 70 per cent of a near-saturated
domestic market. Therefore, emerging markets are the key, as they are
for rival carmakers, and Hyundai already has a major manufacturing presence
in China and India. A new Kia factory in Slovakia is under construction,
and there is to be a concerted push in European markets to raise share
above the current 2.7 per cent across the two brands. That 5.7 million
represents a doubling of the corporation's 2002 output. It is an almost
frightening thought.
The Getz supermini, known
as Click in some markets |
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It was the strength in China, where the Sonata and Elantra are two of
the best-selling cars and Hyundai is a major player in the truck sector,
that appealed to DC when it acquired its 10.5 per cent stake in Hyundai
Motor for €324mn ($400mn) in 2000 after the car division was hived
off from the rest of Hyundai following Korea's 1998 economic meltdown.
DC is now selling that stake as it restructures its global operations,
possibly to compensate for losses incurred with Mitsubishi whose former
DC shareholding has now passed to other Mitsubishi companies, but Hyundai
– which already has a high stock level and is very profitable –
will not be buying it back.
Hyundai's other links with DC are not affected, however. There are four
main joint ventures: purchasing of parts, Chrysler/Dodge-badged Hyundais
in markets such as Mexico, a new four-cylinder engine range to be used
in several Chrysler and Mitsubishi products, and another new engine currently
under wraps. The four-cylinder Theta unit, to be launched first in the
next Sonata due this autumn, spans capacities from 1.8 to 2.4 litres,
and is a dohc 16-valve unit with an aluminium block and head and two sump-mounted,
chain-driven balancer shafts. Later versions of this 'global engine' will
be made at Chrysler's Auburn Hills factory in the US, adding variable
exhaust-cam timing to that for the inlet cam, and there will be turbocharged
derivatives from 2007.
In China the Sonata and
Elantra (right) are two of the best selling cars |
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Hyundai's global ambitions will call for much streamlining of its present
product portfolio, bringing the current tally of 21 platforms down to
somewhere between eight and 14 by 2008. Examples are the next Hyundai
Trajet and Kia Sedona MPVs, to be built on a common base. And from a European
perspective, especially, Hyundai's range lacks cohesion and progression
even more than Kia's does. There is the Getz supermini (known as Click
in some markets), which is understandable enough, but then we have the
Accent, Elantra and Sonata all sitting in between established market segments
with nothing in the crucial Golf/Focus class.
This, though, is about to change. "We will have a real C-segment
car for 2006," says Werner Frey, vice president of Hyundai Motor
Europe which has just opened a €50mn ($62mn) research and development
centre at Russelsheim, Germany, "and we shall also increase the number
of variants in each model range," he adds.
Therefore we can expect, for example, compact-MPV and estate car spin-offs,
but while Hyundai and Kia will make their cars more 'European' in style
there will be no specific European range along Toyota lines. They will
be global cars, some suited to particular markets better than others:
the Euro-look Getz, for example, sells poorly in its home market where
the Sonata reigns.
There is also the matter of differentiating between the products of Hyundai
and Kia, which in Hyundai's case will first bear fruit in that C-segment
car. The problem is similar to that faced by PSA with Peugeots and Citroëns,
and by the VW Group stable. "There will be some overlap but also
some reserved segments," explains Frey, "and we will differentiate
with minor things. There will be a clear design language, a family look,
brand specific interior materials. Hyundai will be more refined, higher
in quality. Kia will be affordable, dynamic and sporty."
Back in Korea, the man overseeing the positioning of Hyundai and Kia is
Young-II Kim, a former designer who in previous lives helped shape the
SsangYong Musso SUV and the Panther Solo (Panther was latterly owned by
another Kim and parts of the cars came from Korea). What, then, are the
characteristics of each make?
"We have a short history," the younger Kim reminds us, "and
frankly we do not have a characteristic. What we do have is an emotional
feeling," he says. That 'e' word is a favourite among the world's
car designers and marketeers, but it is hardly a commodity to be picked
off a shelf. Kim elaborates on the emotional aspect: "Look at the
front of the Sonata, at the shape of the bonnet and fender, or at the
flanks of the Santa Fe off-roader. They are sculptural, muscular. That's
our look."
What Hyundai cars lack so far is a consistent 'face' – currently
some have vertical bars like teeth, others (such as the Santa Fe and the
European-styled Getz) have neater air-slots, but the designers are working
on that. The idea is to move Hyundai a little upmarket, to make it a 'smart
buy' instead of a cheap car much as Skoda has done. Kia, meanwhile, will
become a 'sportier' brand, and to this end a new sports car is on the
agenda. Its last one was a remake of the 1989 Lotus Elan, and was not
a great success. That said, Hyundai is re-entering the World Rally Championship
from late 2006. Clearly there remains some brand-identity confusion.
Hyundai has its research and development centres in Germany, Japan and
the US, but the hub is the recently-opened Namyang centre near Seoul whose
life-size, panoramic viewing screen for virtual reality moving presentations
(complete with real-world backgrounds) of design proposals is very impressive.
Namyang is far away from the production bases in the south of the country,
but it is easier to attract a high calibre of staff if they can live near
Seoul.
There are plenty of projects on the go at Namyang. A Getz has been recreated
in aluminium, and there is a batch of 50 petrol-electric hybrids under
test. The powertrain is devised along the lines of Honda's Civic IMA,
using a 12kW motor to assist the 1.4-litre gasoline engine and achieve
a fuel efficiency of up to 54 per cent better than that of a 1.5 litre
gasoline-only Getz. It might enter production if the trials go well.
Entering the 'green' race
Driving the hybrid at Namyang, for the most part it behaved like a conventional
gasoline-engined example whose only obvious sign of unconventionality,
apart from a CVT transmisssion, was a gauge to show the charge remaining
in the boot-mounted battery pack. Is this the smallest current production-feasible
hybrid?
Hyundai is also well placed in the fuel cell race, with a Santa Fe FCV
having won four medals at last September's Michelin Challenge Bibendum
in California for alternative fuel vehicles. The Santa Fe FCV uses fuel
cell stacks from UTC Power, as does the next stage in the programme, a
fuel cell version of the new Tucson compact SUV complete with lightweight
aluminium panels. This Tucson is claimed to cover about 109km on 4.5 litres
of compressed hydrogen, and its creators say they have solved the fuel
cell problem of freezing in cold weather. Hyundai plans to have fuel cell
production cars by 2010, and meanwhile a fleet of fuel cell Tucsons is
about to go on trial.
Hyundai remains wedded to the idea of a battery pack to give instant power
while the fuel cell works up to its output, but unlike the Santa Fe FCV,
which had an underfloor fuel-cell stack, the Tucson has its stack under
the hood. The electric motor is by Enova, the 152 volt Lithium-ion polymer
battery is a joint venture between Hyundai and LG. Peak motor output is
107ps (80kW), for a maximum speed of 150km/h.
Another Hyundai research project, still in its early stages, is the CAI
(Controlled Auto Ignition) petrol engine, which has no spark plugs but
uses the heat of back-flowing exhaust gases to ignite the petrol-air mixture.
"The advantage is clean, homogeneous combustion; the challenge is
to control it," says head of research Dr J C Park.
Hyundai is clearly determined to reach its fifth-place goal by 2010, and
cement Korea's position as a world player. Two of the rivals will have
to give ground for this to happen. Who will they be?
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