Hyundai Myth Exploded… Maybe

Robert Farago
by Robert Farago
hyundai myth exploded maybe

More than a few industry pundits have taken to calling Hyundai "the next Toyota." The spin: Hyundai is a formidable low-cost automaker whose high quality products are stealing side dishes from Toyota's table, eying the Japanese automaker's main course. As our Steven Lang has pointed out, the Sonata's lackluster U.S. sales help partially put paid to that theory. And now Chosun explodes the myth entirely. The South Korean newspaper reports that the Federation of Korean Industries has discovered that Korea's largest carmaker produced 29.6 cars per worker last year, 57 percent fewer than Toyota's 68.9 cars per worker. "Hyundai Motor’s sales and operating profit per worker were also no more than 40.8 and 22.2 percent of those of Toyota. The Korean company's productivity was worse than that of six other international automakers. Compared to the assembly productivity of 21.1 to 23.2 hours per vehicle by Ford, Honda, General Motors and Toyota, Hyundai and Kia recorded 31.1 and 37.5 hours, respectively." And here's the kicker: "Hyundai paid its workers more than Toyota, with an annual average salary per worker of W57m (US$1=W934) compared to Toyota's W55 million."

UPDATE This just in from Deep Throat: "Methinks the Korean reporting on Hyundai is wrong. There is no way the production per worker is half that of Toyota and they get paid more. They’d be bankrupt. Also, IIRC, the Nummi plant in NorCal produces something like 400,000 units per year on 4,500 workers… but if you add sales/admin/corp staff to that, I can believe somewhere around 70 units/worker/year. And Toyota/Ford/GM take about 30+ manhours per unit of production, not in the low 20 hour range."

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  • Reginald b hartfordshire Reginald b hartfordshire on Dec 18, 2007

    When it comes to labor intransigence Korean unions make the UAW look like angels.

  • Macca Macca on Dec 18, 2007

    Jthorner, I'm not feeling the logo comparison. I mean, both companies start with an "H". Also, it appears that the Hyundai logo is not just an italicized "H" - it has a swoopy, asymmetrical quality to it, which incidentally, sort of cheapens the logo, in my opinion. Further, the Honda "H" is surrounded with a box, whereas the Hyundai "H" gets an oval. It would appear that they tried to create a very un-Honda "H", but that's purely my interpretation. That said, the Hyundai logo is only slightly less ugly than the swoopy Toyota "T" and Chevy bow-tie.

  • Nemphre Nemphre on Dec 19, 2007
    the swoopy Toyota “T” That's supposed to be a T? I thought it was some kind of representation of a globe. When I was younger I thought it was supposed to be a bull; it's easy to see a head with horns.
  • Jthorner Jthorner on Dec 19, 2007

    Hyundai is reported to make many more components in house, so that could indeed be part of why their headcount seems high. It has always aggravated me that financial types think revenue per employee is a key metric. Outsourcing work isn't always cheaper and in fact it is quite possible to improve the revenue per employee metric while reducing profitability, quality, delivery and more. But since outsourcing is all the fad, Detroit should outsource it's strategic planning to a group of well paid TTAC contributors :). They could lay off a bunch of expensive managers and get better results!