SWOT Analysis of Hyundai Motor Company
Hyundai is a famous South Korean automotive manufacturer company founded by Chung Ju-Yung in 1967. The company went through major changes over the years and now it is an established automotive brand that sells commercial vehicles, light vehicles, and buses. Right now, Hyundai is the fifth largest automaker brand in the world. It has a strong presence in more than 185 countries and sells millions of vehicles every year. When it comes to subsidiaries, Hyundai controls approximately 33 % of Kia Motors and other automotive companies, which makes it Hyundai Motor Group. According to Interbrand, it is one of the most worthy brands in the world. Moreover, Hyundai has achieved many safety awards. This SWOT analysis of Hyundai will highlight some important details about the company in the form of strengths, weaknesses, opportunities, and threats.
Company Name: Hyundai Motor Company
Founders: Chung Ju-Yung
Founded: Dec 29, 1967
Headquarter: Seol, South Korea
Parent Company: Hyundai Motor Group
Key People: Chung Eui-sun (chairman)
Eon Tae Ha (president and CEO)
Jae Hoon Chang (president and CEO)
Type: Sedans, Hatchbacks, SUVs
Tagline: New Thinking New Possibilities; Drive Your Way
Unique Selling Proposition: Hyundai is the largest automobile manufacturing company in South Korea and targets every type of customer from the middle to upper-middle class.
Customers: People who love luxury, family, or commercial cars are the main customers of Hyundai.
Target Consumers: Young Executives from middle and upper-middle-class
Revenue: 28867.2 Billion KRW (2021)
Net Income: 1486.9 Billion KRW (2021)
Strengths of Hyundai – SWOT Analysis of Hyundai
Amazing Safety Features and Award-Winning Designs:
Hyundai cars are one of the safest cars in the world. The company made a significant amount of money in the development of cars and safety features. The company has received several awards like IIHS Top Safety Pick+ (Santa Fe, 2016), 5 Star Safety Rating from National Highway Traffic Safety Administration (US), and many more. It seems like the company is not going to stop winning awards. In the period of last six years, Hyundai has won more than 30 safety awards globally. The company has been putting so much effort into enhancing its vehicles, including light and commercial cars. Elantra, i20, Tucson, Sonata, and Genesis are some of the most popular models of Hyundai. These models are one of the most selling cars of Hyundai and won many awards. Also, the company has received more than 20 awards due to its design and models
Highest Brand Reputation:
There is no doubt that Hyundai is one of the most reputable and top brands in the global automotive industry like BMW, Mercedes, Volkswagen, Ford, and Toyota. These companies are trying to take a competitive edge over each other, and due to this reason, they are manufacturing high-quality vehicles for users. The brand value of Hyundai is 15.2 billion dollars (2021).
Strong R&D Department:
In 2015, Hyundai has invested 1.847 billion dollars (or KRW 2.712 trillion) in research and development. This amount was not enough as compared to other brands but it is one of the biggest strengths of Hyundai. Due to this kind of investment, the company has successfully introduced Sonata and Loniq. These electric cars are also capable of running on fuel. So far, the company’s biggest achievement is its hydrogen fuel cells technology. It was the first company that manufactured vehicles running on fuel cells. Hyundai is investing heavily in this technology to gain a competitive edge in the industry.
Cost-effective and Durable Vehicles:
When it comes to well-built cars, Hyundai comes first as they give a 5-year guarantee for cars sold. This thing makes Hyundai the most valuable and most-selling brand in the world. The reason behind giving such a great guarantee is that the company produces high-quality cars. Moreover, Hyundai cars have won several accolades. This is the main reason why Hyundai is a famous global brand.
Strong Hold in China:
For Hyundai, China is one of the biggest markets and it has a strong presence in China. The company has 9 % market share in the Chinese market. The Chinese market is giving several benefits to Hyundai in the form of growth and sales. Just because of this, Hyundai has a loyal customer base and a strong presence in China and the world. Recently, the company has suffered a loss in China due to its expensive SUVs. So, they introduced new SUVs in 2017 that were affordable and cheaper. Stronghold in the Chinese market provides a great growth opportunity to Hyundai.
Weaknesses of Hyundai – SWOT Analysis of Hyundai
Limited Brand Portfolio:
Despite all the strengths, there are some weaknesses that make the company a weak brand. The big thing in this matter is its poor brand portfolio, leading to fewer sales. The company only sells Hyundai and Kia brands (while Volkswagen trades 12 different brands). This fewer brand portfolio causes a limited customer base. So, it is hard to satisfy customers, which affects its sales.
Low Presence in Japan and the US Markets:
The US is one of the leading vehicle markets globally. This market has so many opportunities for automakers like Hyundai. They can earn more revenue and reach by introducing electric cars, trucks, and commercial vehicles in this market. But unfortunately, Hyundai has a limited presence in the US market. They sold less than 10 percent units in this market, which is insufficient. On the other hand, the company has no presence in Japan. It is the biggest weakness of Hyundai, and they should focus on these markets to stay ahead of the competition.
The company’s revenue has been growing over the last few years, but its net profit has decreased due to poor management. The company is facing some management and operational issues, resulting in the decline of its profit. It also includes poor decisions from the core management.
Product recall is one of the major weaknesses of Hyundai. The company recalled more than 470000 Sonata and 305000 other vehicles for engine and light braking issues respectively. The company’s recalled value in the US is very high and this thing is damaging the company’s name and customers. It can create a company’s negative reputation in the market, resulting in lower profits and revenue.
Opportunities for Hyundai – SWOT Analysis of Hyundai
Growing US Economy:
To increase its revenue and profit game, Hyundai should target the US market because it has more to offer. Every year, millions of units are sold in this market from different brands. Moreover, the economic condition of the US is really suitable for Hyundai and it can provide a great growth opportunity to the company. It is a wonderful chance for Hyundai to grow its sales and customer base by focusing on the US market.
Launching of New Models:
The growth opportunity of the automotive brand is based on the frequency and timing of new model releases. It is crucial to upgrade the system and cars every 4 to 5 years to get a competitive advantage. Minor modification is necessary for the cars and it keeps customers engaged. Hyundai can upgrade its vehicles frequently because it invests a great sum of money on R&D. The goal is to manufacture affordable but durable vehicles for every type of consumer and need. In this way, Hyundai can maximize its competitiveness in the automotive market.
Low Fuel Prices:
The decline in the prices of fuel could be beneficial for the company as they can motivate users to buy heavy vehicles like trucks and SUVs. Hyundai mostly produces sedan cars, so they can’t get the advantage of low fuel prices. It is crucial for the company to manufacture more trucks and SUVs because their demand is really high in the US market. By introducing cheaper and quality SUVs, Hyundai can give tough competition to competitors.
Threats for Hyundai – SWOT Analysis of Hyundai
The minor mistake could hurt the earnings of Hyundai. The automotive industry is surrounded by many heavyweights like Ford, BMW, Volkswagen, Mercedes, and Toyota. The strongest market of Hyundai is China, but there are so many local companies that offer the same vehicles at competitive prices. Companies like Tesla and Google are also creating trouble for companies like Hyundai by introducing electric and self-driving cars. Hyundai should pay attention to these factors to produce electric cars.
Increasing Korean Exchange Rates:
International markets are one of the main revenue generators of Hyundai and the company is heavily dependent on this revenue. The fluctuation in the exchange rate could be big trouble for the company. It can damage the revenue stream and profits of the company. The rising Korean exchange rates are proof of this thing, and there is a chance that the company could suffer some loss due to this reason.
Government Rules and Regulations:
Environmental initiatives could increase troubles for the company in many ways. Hyundai is a global brand, so government rules and regulations of every country can also disturb its work. Moreover, the pressure of reducing carbon footprint, greenhouse emissions, and sustainability are some of the big threats for Hyundai. It is hard to survive in this kind of system with expensive products and a limited product portfolio.
Need Help or Advice in Content Management or In Marketing Strategy:
Do you want more advice? Do you have good practices to share? Express yourself in the comments.