1.0 COMPANY PROFILE

1.1 HYUNDAI MOTOR COMPANY (HMC):

The Hyundai Motor Company, a division of the Hyundai Kia Automotive

Group, is South Korea's largest and the world's Sixth Largest Automaker. Its

headquarters are in Seoul, South Korea. In Ulsan, South Korea Hyundai operates

the world's largest integrated automobile manufacturing facility which is capable

of producing 1.6 million units annually. The Hyundai logo, a slanted, stylized 'H' is

said to be symbolic of two people (the company and customer) shaking hands.

Hyundai means "modernity" in Korean.

Chung Ju-Yung founded the Hyundai Engineering and Construction

Company in 1947. Hyundai Motor Company was later established in 1967. The

company's first Giorgio Giugiaro of ItalDesign and power train technology

provided by Japan's Mitsubishi Motors. Exports began in the following year to

Ecuador and soon thereafter to the Benelux countries. In 1991, the company

succeeded in developing its first proprietary gasoline engine, the four-cylinder

Alpha, and transmission, thus paving the way for technological independence.

In 1986, Hyundai began to sell cars in the United States, and the Excel was

nominated "Best Product #10" by Fortune magazine, largely because of its

affordability. The company began to produce models with its own technology in

1988, beginning with the midsize Sonata.

1

In 1998, Hyundai began to overhaul its image in an attempt to establish itself

as a world-class brand. Chung Ju Yung transferred leadership of Hyundai Motor to

his son, Chung Mong Koo, in 1999. Hyundai's parent company, Hyundai Motor

Group, invested heavily in the quality, design, manufacturing, and long-term

research of its vehicles. It added a 10-year or 100,000 mile warranty to cars sold in

the United States and launched an aggressive marketing campaign.

In 2004, Hyundai was ranked second in "initial quality" in a survey/study by

J.D. Power and Associates. Hyundai is now one of the top 100 most valuable

brands worldwide. Since 2002, Hyundai has also been one of the worldwide

official sponsors of the FIFA World Cup.

In 2006, the South Korean government initiated an investigation of Chung

Mong Koo's practices as head of Hyundai, suspecting him of corruption. On April

28, 2006, Chung was arrested, and charged for embezzlement of 100 billion won

(US$106 million), with Hyundai Vice Chairman and CEO, Kim Dong-jin taking

over as head of the company.

In 1998, after a shake-up in the Korean auto industry caused by

overambitious expansion and the Asian financial crisis, Hyundai acquired rival Kia

Motors. In 2000, the company established a strategic alliance with

DaimlerChrysler and severed its partnership with the Hyundai Group. In 2001, the

Daimler-Hyundai Truck Corporation was formed. In 2004, however,

DaimlerChrysler divested its interest in the company by selling its 10.5 percent

stake for $900 million.

2

Hyundai has invested in manufacturing plants in the North America, China,

India, and Turkey as well as research and development centers in Europe, North

America, and Japan.

In 2004, Hyundai Motor Company had $57.2 billion in sales in South Korea

making it the country's second largest corporation, or Chaebol. Worldwide sales in

2005 reached 2,533,695 units, an 11 percent increase over the previous year.

Hyundai has set as its 2006 target worldwide sales of 2.7 million units (excluding

exports of CKD kits).

Hyundai motor vehicles are sold in 193 countries through some 5,000

dealerships and showrooms. After a recent survey of global automotive sales by

Automotive News, Hyundai is now the sixth largest automaker in the world,

surpassing Nissan, Honda, and many other major brands, selling 3,715,096 units in

2005.

Hyundai Motor Company's brand power continues to rise as it was ranked

72nd in the 2007 Best Global Brands by Interbrand and Business Week survey.

Brand value estimated at $4.5 billion. Public perception of the Hyundai brand has

been transformed as a result of dramatic improvements in the quality of Hyundai

vehicles.

Hyundai entered the United States market in 1986 with only one model, the

Hyundai Excel. The Excel was offered in a variety of trims and body styles. That

year, Hyundai set a record of selling the most automobiles in its first year of

business in the United States compared to any other car brand (a staggering

126,000 vehicles).

3

Initially well received, the Excel's faults soon became apparent. Also, efforts

to bring costs down made reliability suffer. With an increasingly poor reputation

for quality, Hyundai sales plummeted, and many dealerships began abandoning

franchises. At one point, Hyundai became the butt of many jokes and even made

David Letterman's Top Ten Hilarious Mischief Night Pranks to Play in Space: #8 -

Paste a "Hyundai" logo on the main control panel.

Rather than drop out of the world's largest automotive market, the parent

company of Hyundai began investing heavily in the quality, design, manufacturing,

and long-term research of its vehicles. It added a 10-year or 100,000 mile power

train warranty to its vehicles sold in the United States. In 20 years, both quality and

sales dramatically increased, and the reputation of Hyundai cars improved. In

2004, Hyundai tied with Honda for initial brand quality (quality of engine parts

not factored in) in a survey/study from J.D. Power and Associates, for having 102

problems per 100 vehicles. This made Hyundai second in the industry, only behind

Toyota, for initial vehicle quality. The company continued this tradition by placing

third overall in J.D. Power's 2006 Initial Quality Survey, behind only Porsche and

Lexus.

Hyundai continues to invest heavily in its American operations as its cars

grow in popularity. In 1990, Hyundai established the Hyundai Design Center in

Fountain Valley, California. The center moved to a new $30 million facility in

Irvine, California in 2003, and was renamed the Hyundai Kia Design and

Technical Center. Besides the design studio, the facility also housed Hyundai

America Technical Center, Inc. (HATCI, established in 1986), a subsidiary

responsible for all engineering activities in the U.S. for Hyundai.

4

Hyundai America Technical Center moved to its new 200,000-square-foot,

$117 million headquarters in Superior Township, Michigan (near Ann Arbor) in

2005. Later that same year, HATCI announced that it would be expanding its

technical operations in Michigan and hiring 600 additional engineers and other

technical employees over a period of five years. The center also has employees in

California and Alabama.

Hyundai America Technical Center completed construction of its

Hyundai/Kia proving ground in California City, California in 2004. The 4,300-acre

facility is located in the Mojave Desert and features a 6.4-mile oval track, a

Vehicle Dynamics Area, a vehicle-handling course inside the oval track, a paved

hill road, and several special surface roads. A 30,000-square-foot complex

featuring offices and indoor testing areas is located on the premises as well. The

facility was built at a cost of $50 million. An aerial view can be found here.

Hyundai completed an assembly plant just outside Montgomery, Alabama

in 2004, with a grand opening on May 20, 2005, at a cost of $1.1 billion. It is

Hyundai's second attempt at producing cars in North America (The Hyundai Auto

Canada Inc. plant in Quebec closed down in 1993). At full capacity, the plant will

employ 2,000 workers. Currently, the plant assembles the Hyundai Sonata and the

Hyundai Santa Fe.

In 2003, According to Consumer Reports, Hyundai's reliability rankings tie

Honda's.

5

In 2005, Hyundai allowed Ed Voyles Hyundai in Smyrna, Georgia to

become the first "dear friendly" dealership in the entire world. The staff in this

dealership is able to accommodate deaf customers with the use of American Sign

Language and video conferencing phones.

In 2006 JD Power and associates quality ranking, overall the Hyundai brand

ranked 3rd, just behind Porsche and Lexus, and beating long time rival Toyota.

The brand overall is ranked much higher than the average industry and resale value

continues to improve, a comparable 2003 Hyundai Sonata sedan ranks just $2200

below a similarly equipped Honda Accord according to Kelley Blue Book Pricing

2006.

In 2006, Hyundai's minivan Entourage earned a five-star safety rating — the

highest honor the National Highway Traffic Safety Administration bestows

— for all seating positions in frontal and side-impact crashes. The Insurance

Institute for Highway Safety also rates “Good” — its highest rating — in

front, side and rear impacts. The IIHS (Insurance Institute for Highway

Safety, US), in fact, has christened the 2006 Hyundai Entourage and Kia

Sedona a “Gold Top Safety Pick,” making the safest minivan ever tested.

In 2006, Hyundai was awarded 'Top-rated 2006 Ideal Vehicle' by Auto

pacific, Marketing research and consultancy firm for the automobile industry.

6

In 2007 Strategic Vision Total Quality Awards, Hyundai Motors leads the most

vehicle segments in Strategic Vision's Total Quality Index, measuring the

ownership experience. They attempt to measure more than just the number of

problems per vehicle. Hyundai tops in Strategic Vision Total Quality Awards.

For the first time ever, Hyundai has risen to share the position of having the

most models leading a segment. three models with the top Total Quality Index

(TQI) score in their segments, including the Hyundai Azera, Entourage, Santa Fe.

In 2007, Hyundai's midsize SUV Santa Fe earns 2007 TOP SAFETY PICK

award by IIHS.

2009, Hyundai has announced the five-door hatchback variant of the Elantra

compact sedan will carry the name Elantra Touring when it goes on sale in the

spring as a 2009 model.

1.2 HYUNDAI MOTOR INDIA LIMITED (HMIL):

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of

Hyundai Motor Company, South Korea and is the second largest and the fastest

growing car manufacturer in India. HMIL presently markets 34 variants of

passenger cars in six segments.

The Santro in the B segment, Getz Prime, i10 in the B+ segment, the

Accent and Verna in the C segment, the Elantra in the D segment, the Sonata

Embera in the E segment and the Tucson in the SUV segment.

7

Hyundai Motor India, continuing its tradition of being the fastest growing

passenger car manufacturer, registered total sales of 299,513 vehicles in calendar

year (CY) 2006, an increase of 18.5 percent over CY 2005. In the domestic market

it clocked a growth of 19.1 percent a compared to 2005, with 186,174 units, while

overseas sales grew by 17.4 percent, with exports of 113,339 units.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai

boasts some of the most advanced production, quality and testing capabilities in the

country. In continuation of its investment in providing the Indian customer global

technology, HMIL is setting up its second plant, which will produce an additional

300,000 units per annum, raising HMIL’s total production capacity to 600,000

units per annum by end of 2007.

HMIL is investing to expand capacity in line with its positioning as HMC’s

global export hub for compact cars. Apart from expansion of production capacity,

HMIL plans to expand its dealer network, which will be increased from 183 to 250

this year. And with the company’s greater focus on the quality of its after-sales

service, HMIL’s service network will be expanded to around 1,000 in 2007.

The year 2006 has been a significant year for Hyundai Motor India. It

achieved a significant milestone by rolling out the fastest 300,000th export car.

Hyundai exports to over 65 countries globally; even as it plans to continue its

thrust in existing export markets, it is gearing up to step up its foray into new

markets.

8

The year just ended also saw Hyundai Motor India attain other milestones

such as the launch of the Verna and yet another path-breaking record in its young

journey by rolling out the fastest 10,00,000th car.

The Hyundai Verna has bagged some of the most prestigious awards starting

with the title of "Car of the Year 2007" by India's leading automotive publication –

Overdrive, the “Best Mid-size Car of the Year” award by the NDTV Profit C&B

Awards 2007, the “Best Value for Money Car” by the CNBC Autocar Auto

awards and ‘Performance Car of the Year 2007’ from Business Standard Motoring.

Last Year Sonata Embera won the ‘Executive Car of The Year 2006’ award from

Business Standard Motoring Magazine and NDTV Profit – Car & Bike

declared the Tucson a the ‘SUV of The Year 2006’.

HMIL has also been awarded the benchmark certification for its sustainable

environment management and practices HYUNDAI MOTOR INDIA Ltd.,

(HMIL), arguably one of India’s premier automobile companies is an offshoot of

the Hyundai Motor Company (HMC) located in Korea.

HMIL produces various cars namely Santro (with 4 Variants), Accent (with

4 variants), Elantra (with 2 variants), and Sonata and Getz (with 2 variants) and

i10. HMI is situated in Sriperumbudur in the Kanchipuram district of Tamil Nadu.

They have dynamic leaders in the form of their MD, Mr. H.S.LHEEM, and their

Chairman Mr. M.K.Chung. HMIL’s policy is always to be a stickler for quality.

This is accentuated by the fact that in the recent Initial Quality Study 2003 (IQS

2003) conducted by6 the JD Power Asia Pacific Group, which judges the quality

for automobiles based on the number of defects reported by consumers9

During the initial period of ownership of the cars, Hyundai Motor India

bagged top honors with Santro securing 1st place in its category with fewer

problems when comparedwith its other models.

FIG 1.1.COMPANY LOCATION

10

1.3 HYUNDAI BUSINESS GROUP:

As the leader in Korea’s economic miracle, Hyundai Business Group has

made well- defined foot prints in the nation’s industrialization and modernization

landscape, and has become the nation’s business group. Hyundai business group is

composed of a total of 51 subsidiaries, ship building, engineering & construction,

heavy industries, machinery, iron & steel, and in cutting edge industries such as

electronics, aerospace, petrochemicals, energy and trade & service sectors. Since its

establishment in 1947, Hyundai based itself on pioneering spirit, sincerity, and

credibility, to make possible not only domestic accomplishment but international

recognition as well.

The Hyundai Group, which has played the role of locomotive for the

remarkable economic progress of Korea known as the ‘Miracle of the Han River’,

started from a small construction company named Hyundai Land and construction

in 1947. After the company was renamed as Hyundai Engineering & Construction

Co., Ltd., it repeated growth and reached the summit in the industry. As its assets

were accumulated, Hyundai extended its business to the automobile, electronics

and heavy industries and became a giant conglomerate with 49 companies in 50

years after its birth.

1970’s: Concentrated investments on the ship building, Automobile, Steel,

and Machine industries and laid a foundation for Korean heavy industry.

11

1980’s: Launched high-tech industries, such as electronics, robot, petroleum

chemistry and space and aircraft and realized the ‘Dream of Korea with

Technology’.

1990’s: launched northward economy (with the old Soviet Union and North

Korea), developed new technologies, reformed management and stressed training

human resources, to achieve the aim to become the No.1 Corporation in the world.

The production management processes at Hyundai Motor India are overlaid

with an organization wide implementation of manufacturing best practices like

Just-in-time,

Kaizen,

TPM and TQM

That helps in making the world’s best cars, right here in India.

1.4 OBJECTIVES OF THE COMPANY:

To set up a state-of-art integrated automobile manufacturing unit.

To attain quality and cost competitiveness, through high levels of

indigenization and ensuring development of the Indian auto industry and

placing it on the world map.

To launch latest international products those are engineered to meet

sophisticated standards the world over.

To establish a high quality services and services network across the

country.

12

1.5 SHOPS IN HMIL:

The Press Shop

The Body Shop

Assembly shop

The Paint Shop

The Aluminum Foundry

The Plastic Extrusion Unit

The Engine and Transmission Shop

The Plastic Paint Shop

P.D.I.

The Test Track

13

1.6 MODELS;

As a leading manufacturer in the automobile sector, HYUNDAI MOTORS

INDIA LTD produces various vehicles in different sector. The company has kept

its mark in every class of automobile industry. The models which are manufactured

in this plant are as follows:

• SANTRO XING (XE, XP, XG, XS)

• ACCENT (CRDI,TORNADO,VIVA,GLS)

• ELANTRA (CRDI,GLS)

• SONATA (GOLD,2.7V6,EMBERA)

• GETZ

• i 10

• i 20

14