Established in 1967, Hyundai Motor Company (HMC), often known as Hyundai Motors, is a global automaker with headquarters in Seoul, South Korea. On a worldwide scale, Hyundai has the biggest fully integrated car production complex. The factory has a 1.6 million unit manufacturing capacity per year. A total of around 75,000 people work for the company worldwide. Hyundai has a vast network of 5,000 dealerships and showrooms to promote and distribute cars in a total of 193 nations worldwide. By attempting to encourage the valueization of time via expanded mobility options, the goal is to ensure a peaceful cohabitation between humans and the world. In order to achieve a sustainable future, the company has started making steps to bring about radical change (Jacobs, 2021). The firm has taken the lead in developing commercial potential for hydrogen as a practical energy source, which is essential to the transformation of civilization worldwide to clean energy.
Hyundai is stepping up its management efforts to proactively identify and solve environmental, social, and governance (ESG) risk concerns, seek creative business opportunities, and gain a new competitive edge by strategically employing various ESG features. In order to achieve the internalization of ESG management across the entire corporate landscape, Koh et al. (2022) argue that the enterprise supports individual organizations’ autonomous ESG improvement initiatives, as demonstrated by the establishment of individual performance objectives for each working-level department and the incorporation of performance outcomes into key performance indicators (KPIs).
Marketing Approach
Hyundai’s marketing strategy is centered on differentiation-based marketing strategies. The main customer group consists of middle-class to affluent people that prioritize quality, affordability, and an enjoyable commuting experience in metropolitan settings (Koh et al., 2022). College students who value speed and style while buying goods or services make up the secondary demography consumer group.
The carbon footprint of Hyundai
According to Seixas & Ferreira (2020), the term “carbon footprint” describes the measurable quantity of greenhouse gases, such as carbon dioxide, that are produced by various human endeavors over the course of a certain period of time. Globalization and population expansion are both intensifying, which has increased the carbon footprint and negatively impacted the climate globally. According to Winkler et al. (2023), road transportation, including that supplied by vehicles, is responsible for the bulk of the over 70% of carbon emissions that are related to transportation globally.
The International ESG Association (IESGA) has recognized HMC for its outstanding sustainability performance and climate change strategy, according to Joo and Shin (2022). By 2045, the firm hopes to become carbon neutral across all stages of operations, including purchasing components, producing, and using vehicles. To reach this goal, it employs a thorough, multifaceted approach with three crucial elements (Lukin et al., 2022). These include expanding its line of clean mobility products, leading the research and creation of cutting-edge platforms for the next generation, and dedicating funds to setting up green energy solutions together with technology advancements.
Clean Mobility
In the next years, Hyundai Motor has promised to steadily increase the market share of zero-emission vehicles (ZEVs). According to Lukin et al. (2022), Hyundai intends to purchase zero-emission cars (ZEVs) in order to reach a 30% market share of global vehicle sales by 2030. In addition, the business projects that by 2040, sales of its fleet would consist of 80% battery electric cars (BEVs) and fuel cell electric vehicles (FCEVs).
Next-generation Platforms
The development of next-generation transportation platforms has received substantial investment from Hyundai Motor Company. which provide unprecedented levels of mobility freedom while drastically decreasing carbon emissions, including a fresh and disruptive spectrum of mobility choices including autonomous cars and urban air mobility (UAM) (Lukin et al., 2022). These programs show Hyundai’s commitment to raising the standard of urban living for future residents and are consistent with the company’s “Progress for Humanity” mission.
Green Power
The strategic strategy used by HMC to being carbon neutral goes beyond the use of ZEVs. A wide range of stakeholders are to be provided with sustainable, eco-friendly energy choices (Lukin et al., 2022). The organization’s sustainable business practices include integrating renewable energy sources into its production facilities and pursuing future technological investments in green hydrogen produced from renewable energy, vehicle-to-grid, and the Second Life Battery Energy Storage System.
SWOT Analysis of Hyundai
Strengths
The key competency of Hyundai is its cutting-edge marketing approaches, which use well-known people as celebrity brand ambassadors to promote its brand internationally. As a consequence, the brand may become more accessible and user-friendly, increasing sales and proving the effectiveness of their marketing efforts. This is made possible by having the ability to affect the tastes and preferences of customers. According to Interbrand, the brand value of the car manufacturer is sixth in the world. The value of the Hyundai brand was $14,295 million in the fiscal year 2020, a rise of 1% from the year before. A number of criteria, including product innovation, safety, sustainability, product line, and an established worldwide distribution network, contribute to the company’s capacity to preserve its brand image and value. Additionally, Hyundai’s businesses are present in more than 190 different nations, which has strengthened its position as a major player in the industry. Lukin and colleagues (2012).This company demonstrates skillful management of its global supply chain network, successfully distributing its goods to specified customer categories via a sizable global network of 6,000 dealers. This has produced impressive financial advantages and made a major contribution to its entire sales income.
In order to fulfill their responsibilities to protect society’s and the environment’s welfare, businesses must practice corporate social responsibility (CSR). Hyundai Motors has a strong sense of CSR, which is shown by the various measures it has taken to advance environmental and social well-being (Lukin et al., 2022). The effort involves providing sitting amenities to public educational institutions, expanding the area covered by forests in Tamil Nadu, advocating for products made of ecologically friendly materials, and other activities.
Weaknesses
Hyundai is one of the top five global automakers, yet it has a reputation for having a very limited brand selection. The company only sells Hyundai and Kia vehicles. In comparison, General Motors provides nine different brands, Chrysler sells eight, and Toyota distributes four different brands. Volkswagen offers a range of twelve different brands. Only Ford and Hyundai are the two vehicle manufacturers that sell under two different labels. According to Lukin et al. (2022), a smaller brand quantity results in a smaller pool of possible consumer groups that can be successfully supplied, which eventually has a detrimental influence on the enterprise’s profits.
Opportunities
The emerging countries in Asia, Europe, and Latin America have enormous development potential. As a result, the business must keep improving and enhancing its product range via research and development, as well as strategically marketing its goods in emerging areas. In order to do this, it is crucial to coordinate organizational development with market expansion. With its electric and hybrid vehicles, Hyundai has developed a strong reputation (Lukin et al., 2022). For them, this is a significant event. The company may increase its manufacturing size while making these goods more affordable. Hyundai can maximize this potential by doing this.
Threats
Compared to its rivals, Hyundai Motors sells its automobiles at a lesser price. Despite this benefit, many people choose not to own a car and instead utilize public transit, such buses and trains. Therefore, using other modes of transportation is a significant barrier to the company’s growth. Hyundai also confronts fierce competition from well-known companies like Toyota, Honda, Tesla, BMW, Ford, and many more. Hyundai’s market share has significantly decreased as a result of the growing number of rivals. As a result, the business may be dangerous (Lukin et al., 2022). Additionally, because of its extensive worldwide activities, it tends to follow the rules and guidelines established by other nations and their respective governmental authorities. Concern about abrupt changes to the environment and policy remains.
Recommendations
Electrification of New Vehicles
Fig 1: Electrification of cars (Benefits of Electric Vehicles Infographic, 2020).
Increasing the percentage of Hyundai vehicles sold with electric drivetrains is a significant step in our efforts to become carbon neutral, according to Dean & Kockelman (2022), who acknowledge that electric vehicles can significantly reduce carbon emissions related to personal transportation.
Hydrogen Boost
Fig 2:Hydrogen boost in automobiles (LePan & Rao, 2020).
According to Yu et al. (2020), the use of hydrogen goes beyond that of a simple alternative fuel source. Hydrogen, one of the most frequent elements in the cosmos, offers a long-term solution to the problems the energy industry is now facing. This clean energy source has the enormous potential to transform commerce, all sectors of human life, including transportation. Achieving carbon neutrality depends heavily on the growth and diversity of hydrogen-electric vehicle types throughout a range of transportation sectors, including but not limited to passenger cars, trucks, and buses.
Conclusion
Hyundai has made considerable progress thanks to persistent efforts. Through effective business models, strong marketing techniques, and significant social contributions, Hyundai became a well-known player in the motor manufacturing sector. However, investing resources in developing regions and finding a cost-effective way to provide customers access to updated car models can help the brand rise above the competition.
References
Benefits Of Electric Vehicles Infographic. (2020). Video Paradigm. Retrieved May 10, 2023, from https://online.visual-paradigm.com/es/infoart/templates/infographics/benefits-of-electric-vehicles-infographic/
Jacobs, A. J. (2021, December 11). Hyundai Motor Part I: From Construction to Cars, Beginnings to 1987. Hyundai Motor Part I: From Construction to Cars, Beginnings to 1987 | SpringerLink. https://doi.org/10.1007/978-3-030-86347-0_7
Koh, H. K., Burnasheva, R., & Suh, Y. G. (2022, April 11). Perceived ESG (Environmental, Social, and Governance) and Consumers’ Responses: The Mediating Role of Brand Credibility, Brand Image, and Perceived Quality. MDPI. https://doi.org/10.3390/su14084515
LePan, N., & Rao, P. (2020, May 19). 6 Ways Hydrogen and Fuel Cells Can Help Transition to Clean Energy. Visual Capitalist. https://www.visualcapitalist.com/6-ways-hydrogen-and-fuel-cells-can-help-transition-to-clean-energy/
Seixas, J., & Ferreira, F. (2020, December 2). Carbon Economy and Carbon Footprint. Carbon Economy and Carbon Footprint | SpringerLink. https://doi.org/10.1007/978-3-030-58315-6_1
Winkler, L., Pearce, D., Nelson, J., & Babacan, O. (2023, April 24). The effect of sustainable mobility transition policies on cumulative urban transport emissions and energy demand – Nature Communications. Nature. https://doi.org/10.1038/s41467-023-37728-x
Joo, J., & Shin, M. M. (2022, January 27). Business Ecosystem Management and Editorial on the Special Issue. MDPI. https://doi.org/10.3390/su14031449
Lukin, E., Krajnović, A., & Bosna, J. (2022, March 28). Sustainability Strategies and Achieving SDGs: A Comparative Analysis of Leading Companies in the Automotive Industry. MDPI. https://doi.org/10.3390/su14074000
Dean, M. D., & Kockelman, K. M. (2022, March 17). Are Electric Vehicle Targets Enough? The Decarbonization Benefits of Managed Charging and Second-Life Battery Uses. Transportation Research Record: Journal of the Transportation Research Board, 2676(8), 24–43. https://doi.org/10.1177/03611981221082572
Yu, X., Sandhu, N. S., Yang, Z., & Zheng, M. (2020, August). Suitability of energy sources for automotive application – A review. Applied Energy, 271, 115169. https://doi.org/10.1016/j.apenergy.2020.115169
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