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History of Hyundai
It is impossible to discuss the history of South Korean carmaker Hyundai without looking at the Korean peninsula’s history—and the act of war started by Communist Russia, which instigated Communist North Korea’s attack on South Korea on June 25, 1950.
That invasion started what has become known as the Korean War, which, in fact, was a proxy war between Communist states, such as China and Russia, and the United States of America through the United Nations. The war lasted three years and had a devastating effect on both states, with thousands of Americans captured, wounded, or killed.
The American military’s defense of South Korea against the North Korean dictatorship had a major impact on the South Korean economy. Western influence on the agricultural Asian country led to an unprecedented advancement of capitalism and, within a generation, South Korea grew from one of the poorest countries to one of the most productive nations. Run by a state-sponsored cartel called chaebol, South Korea is still government-controlled, which has caused economic crisis, but free market ideas have allowed South Korea to make progress.
One example is Hyundai, a competitor in the U.S. car market, whose former chief executive officer, Lee Myung-bak, was elected president in 2007 on a platform of change toward more capitalism. Hyundai entered America’s automotive market in the late 1980s with relatively inexpensive cars.
Today, according to Edmunds.com, Hyundai vehicles have a reputation for reliable performance, low cost, and one of the industry's longest warranties.
Hyundai was created as the Hyundai Civil Engineering Company in 1947 by Chung Ju Yung. Bombed by the Communist North Koreans, Hyundai struggled to survive. Following the war—which was paused but not ended by both Korean states in 1953—Hyundai concentrated on rebuilding South Korea; it made money throughout the 1950s.
With capitalism spreading in South Korea, Chung’s company entered the automobile business in the 1960s. Against the dictates of South Korea’s government, which favored importing vehicles rather than allowing businesses to make their own choices, Hyundai’s founder, like America’s great automotive innovators, defied the state and, instead, acted upon his own judgment. Chung Ju Yung founded the Hyundai Motor Company in 1967.
Hyundai negotiated a contract with Ford Motor Company—which resulted in the Cortina, Hyundai's first car—and studied the car trade. Using technology from another postwar Asian state that benefitted from American capitalism—Japan’s Mitsubishi—Hyundai conceptualized, made and sold its first car in South Korea, the Pony, in 1974.
In 1986, its first entry in the U.S. car market, the Hyundai Excel, was a success. The profits permitted Hyundai to make cars using proprietary technology. That led to the midsize Hyundai Sonata. Sales suffered n the 1990s when the company’s cars underperformed with multiple problems. Hyundai would have to improve quality in order to compete.
They did, consumers noticed and the transformation is working, with improved warranty terms and increasing sales. With a limited product line, Hyundai is making cars within its capability, expanding (Hyundai bought South Korea’s Kia in 1998) and making cars and Sport Utility Vehicles (SUVs) with a reputation of affordable value and fuel efficiency.
[Sources: Encarta, Edmunds.com]
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