By on April 10, 2013

A Reuters article on Hyundai’s recent quality problems raises an interesting question. Has the company grown too fast following an unprecedented image makeover?

Reuters quotes a Korean professor of automotive engineering discussing Hyundai’s recent quality issues

“Hyundai has built factories very fast around the globe until recent years, but its quality improvement has failed to keep up with its rapid volume growth,” said Kim Phill-soo, a professor at Department of Automotive Engineering at Daelim University College in Seoul. “The latest recall highlighted loopholes in Hyundai’s quality system.”

The most recent recall, which involves a brake lamp switch, affects 1.9 million vehicles in the United States alone, according to Reuters. There have been other recalls as well, including rusty subframes and self-deploying airbags. Despite these problems, Hyundai has managed to ride a wave of goodwill on the strength of their products and their image turnaround. Hyundai has become an underdog company that people are willing to root for, and the recent fuel economy snafu, that ended up becoming a non-event for many people, is strong evidence of how effective they are at managing their PR affairs.

On the one hand, I have to wonder if the latest recall is a result of the increasing standardization of auto parts. The nature of this phenomenon suggests that when parts fail, the failure can cascade across mass quantities of vehicles, resulting in the mega recalls we’ve seen over the past few years. With the implementation of modular architectures and further standardization, the potential for these mega recalls only increases. Just wait till Volkswagen’s MQB cars suffer their first recall for a look at the “new normal” of recalls will be.

But that shouldn’t discourage us from asking if there may be underlying quality issues at Hyundai. Jack Baruth noted that the Elantra he rented last year looked a little worse for wear compared to other cars of a similar vintage – though notably, the car’s fuel economy did meet his expectations.

Lacking the requisite manufacturing and engineering knowledge, I’ll put this one to the B&B, rather than submitting my theory as a definitive answer. Have at it.

Get the latest TTAC e-Newsletter!

54 Comments on “QOTD: Is Hyundai Growing Too Fast?...”


  • avatar

    ADVERTISING is EVERYTHING.

    Keeping your name out there and your symbol up front in the minds of people is how you get ahead. Some people call it trolling…it’s “product placement”.

    Years ago I used to scoff at the idea of driving a Hyundai or Kia. Then I found myself wanting to drive and even recommend the Sonata, Optima, Genesis, Veloster, Elantra, Sportage and Cadenza over the equivalent item from Honda or Toyota (with the exception of the Camry).

    If Hyundai could make a believer out of me, they must be doing something right.

  • avatar
    cargogh

    The Sonata is looking a little too swoll.

  • avatar
    DGA

    Same thing happened to the all might Toyota when they took the biggest manufacturer spot from GM, quality went downhill and it showed by the amount of recalls they had/have. You could argue that Toyota has not pulled out of it yet.

  • avatar
    niky

    Look, if Hyundai gets to make Toyota- and Honda-level recalls and still sell cars, I think they’re doing something right.

    Recall-i-tis affects the entire industry, and yes, it’s likely because of increasing standardization that they’ve gotten so big.

  • avatar
    gslippy

    Don’t forget that in today’s litigious society, it only takes relatively few incidents for a company to issue a massive recall.

    I don’t know who Hyundai’s brake switch supplier is, but the fault lies somewhere among the part’s design, initial qualification both at Hyundai and the supplier, and ongoing inspection/sampling that missed the problem. Not to mention aggravating factors like assembly issues when it’s put in the car.

    Even in my own company, we’ve just encountered a faulty part that is used in nearly all of our products. The supplier used a poor batch of alloy, and now we’re trying to figure out how widespread our risk is. It’s a commodity part and an excellent supplier we would never have doubted before.

    There is a certain thrill for people to see a giant fall. In this case, I think the quality problems are not that bad, and the ‘falling’ at Hyundai isn’t really happening.

  • avatar
    segfault

    A brake lamp switch is one of those parts which should never, ever fail, yet our family has had to replace them on the VW and Volvo products we’ve owned.

  • avatar
    tresmonos

    Speaking on the word of a friend who is a third party consultant for most major OEM’s, Hyundai’s powertrains are world-class. He led me to believe that in the current industry climate, it’s hard to find any OEM lacking in manufacturing efficiency, engineering robustness and bench marking across the spectrum.

    From personal experience, Hyundai’s interiors are a bit cheap. They lack durability. Some of their faux wood is just a plastic wrapping. The belt molding doesn’t hold up to the temperatures of a cigarette being held out the window.

    I wouldn’t go far to say their quality is significantly lacking, I would say that they are still teething their way out of the cost saving mentality they used to be known for.

  • avatar
    wsimon

    I would argue yes, it is growing too fast, and would issue a warning for prospective Hyundai-Kia owners. I recently had a 2013 Kia Optima rental with around 24k on the odometer, and on the second day of my rental the fuel gauge, trip computer, cruise control, and odometer stopped working, and would not start working again despite several vehicle restarts. Given that this is the first time I am even aware of a frozen odometer occurring, my opinion of Kias had once again been lowered, despite a promising drive with a late model Kia Sportage a year ago. Perhaps I have just been receiving rotten luck with rental cars lately, but those sort of electrical problems do not bode well for long term usage.

  • avatar
    b787

    “On the one hand, I have to wonder if the latest recall is a result of the increasing standardization of auto parts. The nature of this phenomenon suggests that when parts fail, the failure can cascade across mass quantities of vehicles, resulting in the mega recalls we’ve seen over the past few years. With the implementation of modular architectures and further standardization, the potential for these mega recalls only increases. Just wait till Volkswagen’s MQB cars suffer their first recall for a look at the “new normal” of recalls will be.”

    Insights like that are what separates you (and TTAC writers in general) from average car writers who just uncritically repeat, what the source article claims.

    • 0 avatar

      Thank You

      • 0 avatar
        PrincipalDan

        True, does your company use the same switches and relays in all their vehicles? One issue with a supplier can mean that millions upon millions of vehicles will be affected.

        An interesting comparison would be assembly quality across a company at its factories around the globe. How does an Alabama built Sonata compare to a Korean built model? How does a Honda Fit compare from the locally assembled models continent to continent?

        • 0 avatar
          tresmonos

          There are a lot of identical parts sourced at different supplier facilities. It all depends on the business case. Is the part complex and expensive? Probably a single source part. Is the part cheap and requires simplistic labor to assemble? You can bet that part is sourced in whichever BRIC or Mexican plant is closest to final assembly.

          • 0 avatar
            bumpy ii

            And sometimes the parts are not quite identical. Fun factoid: the side mirrors from a Japanese-built B13 Sentra will not fit the doors of a US-built B13 Sentra, but the US mirrors will fit the Japanese door.

      • 0 avatar
        George Herbert

        Oh, no fair, you had advance warning of ToyNisOndAzda’s massive early-2000s models airbag recall, didn’t you…

    • 0 avatar
      bd2

      Pretty much this, along the increase in Hyundai sales (so there are now more Hyundai cars to recall).

      Pretty much the reason why Toyota has led in recalls over the past 4 years aside from the one year that Honda managed to bump them off the top spot.

  • avatar
    Kyree S. Williams

    I too have noticed Hyundai/Kia’s quality issues. I researched some pre-owned 2011 Optima SX units for someone, and was surprised to find that a lot of the switchgear’s paint had worn smooth, and the seats seemed to attract dirt and scratches far more than other cars in that class. Some pre-owned 2011 Sonatas told a similar story…

  • avatar
    carguy

    Fast growth is a challenge for any company and Hyundai is no different. However, I doubt that this will hold back the company in any significant way as they seem to have demonstrated a good understanding of consumer tastes in the areas of value, styling, warranty and initial quality – and the sales results speak for themselves. Given the quality improvements over the past generations of their vehicles, I don’t doubt their resolve to continue the improvement process.

    Right now quality is probably a much bigger concern for VW, Chrysler and even Ford than it is for Hyundai.

  • avatar
    tankinbeans

    I think in their quest to be the next Toyota they have gotten a little trigger happy and aren’t putting as much thought into the design of some mundane, but critical parts. They seem to be forgetting just how much hard work they had to put in to bring their reputation out of the dumps.

    While I don’t think this switch is the end of the world, and don’t subscribe to the idea that because there’s been a recall all is lost, I do think that they want to slow down and grow more naturally. Being the biggest man on the block doesn’t help if you’re soon knocked down by being cocky.

    I won’t avoid Hyundai/Kia based on one recall or “quality issues,” but I will say that there is still work to be done.

    I had my Forte for 2 years, and it was mostly a great little car. The only issue that kept popping up was an issue getting into 4th gear. It didn’t matter what speed I was going, the shifter would periodically stop midshift as if running into a gate.

    The difference between that and my Focus is night and day. Does this mean that now I hate Kia? No, it simply means that I had a bad experience (honestly the bad experience was with the morons at the dealership who more or less said it was all my fault, and that I wasn’t moving the shifter properly. I drove that car like every other manual I’ve had, and have not had a similar issue).

    Recalls =/= automatic garbage
    Recalls = we’ve been made aware of a problem and are trying to address it.

  • avatar
    krhodes1

    I have no problem with recalls. They found a problem, they are fixing it. Big deal. I have a bigger issue with companies who KNOW they have a problem, and stonewall it. Myriad Big Three issues, Toyota sludging, Honda transmissions, etc.

    • 0 avatar
      Hummer

      Agreed.

    • 0 avatar
      corntrollio

      Agreed. Manufacturing defects will happen, and occasionally you could engineer something better. There are some manufacturers that step up, by voluntary recalling cars, by extending warranties on certain parts, by replacing certain parts proactively, and by continuously improving those parts over the manufacturing timeline. There are others that aren’t as good about that.

      Derek, thanks for your thoughts on mass recalls. We could couple this article with Alex’s article on 8-speed transmissions and the sharing of parts bins between manufacturers.

      It’s certainly why some Ford recalls have been so big. There are certain parts that get shared across a variety of cars over time — things like ignitions, for example.

    • 0 avatar
      sunridge place

      @krhodes1

      You have to understand what a recall is. Its a safety concern. A sludging engine isn’t technically a safety concern. Transmission problems are rarely recalled–only when its something weird like the PRNDL can shift out of Park into Neutral or something like that does it trigger a recall.

      I kind of chuckle when I hear people say something like: my CD player stopped working and I found 23 other people online who had the same problem–they need a recall. Uhh, no they don’t. It sucks, but you need to pay to fix it.

      If you have 500,000 transmissions on the road with a fail rate of 10% at fairly low miles (but still out of warranty) , you would be a fool to ‘recall’ all those cars and fix the 450,000 transmissions that are doing just fine. OEM’s use Special Coverages in those cases to assist with out of warranty issues. Some do it better than others.

      The internet has certainly helped educate people on these things–but it also draws people to an unusual amount of drama as well.

      • 0 avatar
        Onus

        Good post.

        I agree and know from basic statistics.

        Usually parts have an accepted failure rate. People always complain that they should check everything 100% but, doing so isn’t economically feasible.

        The fact is cars break, and they always will. Put money away into a maintenance fund or something if you can’t afford repairs.

      • 0 avatar
        modelt1918

        Could it be possible that the 10% just don’t know how to take care of a car properly?

    • 0 avatar
      Beerboy12

      Agree, to me a recall is honesty from the manufacturer. I have no issue and while I would prefer not to have the hassle, I am happy to book in for a recall repair.

      • 0 avatar
        sunridge place

        Its a nice thought that its all about ‘honesty’ but recalls are all about the TREAD Act since 2000. Look it up and read about it and you’ll see. TREAD and the componets about civil and criminal liability and not acting on internal data is what Toyota dealt with. The Watergate effect–the coverup (in govt eyes) was worse than the original (unproven) crime of unintended acceleration.

        A lot of that honesty is to avoid massive fines if you don’t take appropriate actions. I’m not saying the OEM’s don’t care–but to give credit to good ole fashioned honesty is a bit of a stretch.

    • 0 avatar
      Firestorm 500

      Head-gasket blowing Northstars.

  • avatar
    Cubista

    “The Fast and the Furious: Tokyo Drift” proves to be an anachronism within less than five years of its release with one of Han’s more memorable quotes:

    “You’re representing me now. What you think, I’m gonna let you roll in a Hyundai?”

    Sure, it’s a throwaway line from a fringe movie that a small number of the moviegoing public (hell, a small number of the AUTOMOBILE DRIVING public) saw, but there is no way that it finds its way into any movie in that franchise since 2010.

    The other week my daughter (who turns 16 in June and is only now beginning to get excited about the notion of being able to legally drive on her own) asked me what I thought the best carmaker on the planet was, and after consideration that was a lot more intense than I thought it would be, I couldn’t come up with any reason NOT to pick Hyundai. They literally have something for everyone. They are technologically forward-thinking, not afraid to take a chance RE: designing (the Veloster, good case-in-point…Nissan would have been laughed out of any car show pulling the cover off of that; Hyundai gets taken seriously and gets criticism not for how bizarre it is, but for why it’s so underpowered)…they have the upscale halo car in the Equus, midsize performance in the Genesis (in both sedan and coupe variations), and the basic family car in the Elantra flexibly available as a sedan, coupe, and hatchback. And these are just the basics, not even covering the SUV models, all of the cars badged under the Kia name (which may be even more impressive, if we’re honest), and the ridiculously extended warranties that they’re still able to offer while undercutting the pricing of just about any import brand and most domestics, as well.

    We were not shopping Hyundais when we bought new cars in 2012 after the baby was born (wife: Mazda5; me, Nissan Cube); there is no way we would rule them out the next time we’re in the market for something new.

    • 0 avatar
      bumpy ii

      Glengarry Glen Ross (1992)

      “…because you drove a Hyundai to get here tonight; I drove a $80,000 BMW.”

      “You see this watch? That watch costs more than your car.”

    • 0 avatar
      gslippy

      @Cubista – As a H/K fan, I agree with your post.

      But one major thing they lack – trucks. I’m not suggesting they should make one, but it’s a huge market they can’t touch. Honestly, I’m sure they’ve looked at the efforts by Toyota, Nissan, Honda, Mitsubishi, Isuzu, Mahindra, and others – and figured why bother getting killed in that market?

    • 0 avatar
      azmtbkr81

      I think that you’ve pinpointed the crux of Hyundai’s problem: despite recent improvements they are still the “why not” brand; they are the Marshmallow Mateys sold in a big bag that no one ever buys if they can afford Lucky Charms.

      People see Hyundai as a “young” brand but the reality is that they’ve been in the US market for nearly 30 years which was plenty of time for the Germans and Japanese to differentiate their products out of the value market – a market that Hyundai seems perpetually stuck in and poised to lose once the Chinese auto brands start to gain traction.

  • avatar
    car_guy2010

    I will say that Hyundai has come a long way since the ’97 Accent that I had. It wasn’t the best car out there but it got me where I needed to go. I’m glad to see that they’re making some inroad on vehicle quality.

    Ditto for Kia. I knew someone with a ’99 Sephia that grenaded at least 3 transmissions.

  • avatar
    DC Bruce

    The issue with Hyundai is figuring out how to build cars to a price, given that their business strategy is to offer “value” (i.e. the same product as manufacturer X, but for less money). Thanks to their 100,000 mile powertrain warranty, they have decided not to take money out of the powertrain. So, they have to figure out somewhere else to do it: materials, paint, etc. Experience (or the lack of it) could potentially count for a lot in this area.

    Getting this wrong can be very costly.

    A good example of this is the first-generation Chrysler 300 sedan. Great styling (you either like it or not), pretty good drivetrain, at least with the hemi V-8, good brakes and suspension. But a severely decontented interior that really hurt the perception of the whole car.

    V 2.0 pretty much fixed the interior problem, added a great drivetrain (the 3.7 liter V-6 and 8-speed autobox), but the public is kinda yawning at the car.

    • 0 avatar
      Kyree S. Williams

      Do you mean the *3.6-liter* Pentastar V6?

    • 0 avatar
      bd2

      Except Hyundai’s paint quality is one of the best in the business for mainstream autos and if you haven’t noticed, Hyundai has been improving the quality of materials used for the interiors (see current Santa Fe Sport and Azera in contrast to the older versions).

  • avatar
    Beerboy12

    One upshot to shared components is that if there is a problem found, the problem can be fixed across all models with out too much head scratching. It might be better to recall all products than to recall econo-box for one thing and mid-size for another, etc. It’s the same reason shared components are used in software engineering.

    • 0 avatar
      Hummer

      That kinda seems reversed, if a part is only used in one model, then that narrows down the scope and the cost of the recall, and automakers are much more willing to make a recall for something that has a cheaper end solution

  • avatar
    bd2

    The problem is not Hyundai growing too fast.

    The problem is Hyundai, like all automakers nowadays, using the SAME supplier/component across model lineups in order to reduce costs so now one faulty part means recalling many more vehicles.

    And now that Hyundai sales gave grown, that also means recalling more vehicles (so getting bigger is part of the problem – which is why a Suzuki recall wouldn’t have nearly the no. of recalled vehicles).

    Madzas are particularly known for rust problems, but since Mazda’s sales are relatively small compared to the larger automakers, the nos. don’t look as bad when it comes to recalls or other problems.

    • 0 avatar
      sunridge place

      Rust recalls are only done with the rust can be associated to a safety comcern. I could be wrong, but I don’t think Mazda has ever had a rust related recall in spite of their reputation for excessive rusting.

      Now, if the rusting impacts the control arms and could cause loss of control? Recall possible. If the rusting impacts the under-vehicle spare tire holder and could possible cause the spare tire to fall out on the road and cause a safety concern? Recall probable only in select snow states.

      Even Ford’s big rust recall was because the spot of the rusting could possibly cause the third row seating in their minivans to come loose–not just because it rusted. Recall only available in vehicles bought and registered in select states.

      • 0 avatar
        bd2

        Well, maybe Mazda managed to evade having to do a recall due to corrosion to the frame/subframe, control arms, etc. – but there have definitely been complaints about rust in those areas for Mazdas.

        It would be peculiar if that was the case considering that just about every mainstream manufacturer has had safety recalls due to corrosion issues – Toyota, Nissan, Honda, Subaru, the domestics, etc.

  • avatar
    CapVandal

    http://finance.yahoo.com/echarts?s=USDKRW%3DX+Interactive#symbol=;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

    The Korean Won (KRW) was seriously devalued in 2008 — about the time that Hyundai started kicking ass in the US.

    Over roughly the same period, the Yen strengthened — falling from 120 +/- to below 90.

    The Koreans did to the Japanese exactly what the Japanese did to us in the 1970-1990 Period.

    A weak (enough) currency trumps management and engineering.

    2008 was a perfect storm. They finally had a decent product. They were the value proposition at that time. They threw in the PR advertisements/promotion of buying back your car if you lost your job.

    If KRW slips below 1k, then Hyundai will be in a world of hurt — just like the rest of the world.

  • avatar
    oldyak

    Hyundai used to be a real value and you got what you paid for.
    Now their pricing is getting close to the competition and with that in mind what is your gut feeling about a Hyundai?
    Really!
    Its a perception/ nameplate thing…and any recalls involving the brand cant be good.
    The great steps Hyundai/Kia have made are yet to be proven as the cars get older.
    That`s where Honda/Toyota have a solid history as documented by owners and the press.

    • 0 avatar
      bd2

      Toyota, Nissan, Honda and Mazda just recently announced a massive recall for 3.4 million vehicles worldwide over an airbag defect.

      The reason for such a massive recall enveloping all 4 brands is b/c they all used the same Japanese supplier Takata.

      Of course, Toyota being the biggest of the 4, it has the largest no. of vehicles affected by the recall and Mazda, the smallest.

      Pretty much goes with the whole mass commodification of auto parts.

  • avatar
    CelticPete

    I think Hyundai will continue to do well. So no they are not growing too fast. It seems to me that in general the worm has turned and Korea is beating Japan and its own game across the board.

    I am not sure why – it might have to do with demographics (the horrible aging and shrinking of Japan) but its not just limited to cars. Samsung seems to be dominating Sony which has lost money 4 years in a row.

    Obviously compared to that the car companies are a shining success for Japan. But its hard to imagine they can fight the Japanese slide forever.

  • avatar
    IHateCars

    I still vivdly remember the Ponies and Stellars from my high school days so yeah, they have indeed come a looong way. But it’s because of those craptacular cars that I just can’t see myself every buying one. Biased, I know….but I could never do it.

    • 0 avatar
      onyxtape

      Same here. Grew up around the time that the Excel and Ponies dominated the laugh tracks of the late night shows. Even though my own father now has a Genesis sedan and raves about it every chance he gets (and I’ve driven and have positive feelings about it), there’s always going to be that hesitation before deciding to trek over to the neighborhood Hyundai dealer.

  • avatar

    We looked at Hyundai last summer when it was time to replace the Better Half’s 2000 Corolla. Specifically the Azera and the Santa Fe. The Azera was nice and seemed like a well built car. Entry level model had plenty of standard features that seemed to be options on other cars. Sun roof, leather, V6 etc. The Santa Fe was also nice, but the center console was a mess (since cleaned up in the 2013). Both cards drove good, but not great. However, we just couldn’t pull the trigger because we weren’t sure if the new image was all just PR smoke or if they were really trying to move past the image of a cheap import that I remember being associated w/ Honda and Toyota when I was a kid. Fair or not, that’s the stigma that I think Hyundai is currently trying to conquer. Ultimately, it was a poorly played, last second hard sell from a local dealer that sealed Hyundai’s fate in our book. As a result, we went with an Acura that we absolutely love. Fast forward a few years when it’s time to replace my ride, I’d have no problem taking another look at what Hyundai has to offer.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India