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Hyundai's 10-year plan
00:00 01 Jun 2000
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Hyundai Heavy Industries unveiled details of an ambitious plan that
it believes will see its construction equipment division ranked
number one domestically and number five in the world within 10
years.
Details were revealed to Plant Managers Journal last month at Hyundai's head office in Ulsan, Korea, of the business plan entitled 'Action 2010'.
To achieve its targets Hyundai will spend a total of £371m: £216m in facility investment by building a new manufacturing plant for machines and components at home and abroad; and £155m will be spent on extending its business to include telescopic handlers by 2003, backhoe loaders and off-highway dump trucks by 2006, and agricultural tractors, road machinery and tunnel boring machines by 2010.
Currently, Hyundai lies 17th in the world market for construction kit with a 1% share, but the targets are designed to enable it to be 15th by 2003 with a 1.3% share, 11th by 2006 with a 2.2% share and fifth by 2010 with a 4.4% share. The firm is also aiming to increase annual turnover from £263m now to £690m by 2005 and £1.875bn by 2010.
Hyundai believes this can be achieved through:
l Market expansion by steady development of potential dealers in new markets.
l Increased productivity by joint out-sourcing, new value products and the setting up of overseas factories.
l Increased customer satisfaction by cyber-trade, enforcement of parts support and the other supporting strategies.
l Maximised turnover by diversification of product and optimised sales networks.
MS Yahng, general manager of HHI, said that its aim of becoming number five in the world was a realistic target. "It would not be easy to become world market leader in a comparatively short period as we only started our business in the latter part of the 1980s. After the realisation of our 2010 target, our next stage will be to work out the plans to become number one."
Yahng denied the plan was being launched because of the healthier position of the won (the Korean currency). "As the competition in the construction markets is getting increasingly fierce, we have started the plan to actively cope with the market circumstances and to secure the product competitiveness," he said.
The Korean giant has also revealed details of six other goals that it aims to achieve by 2010. First, is the development of new models. It plans a full line-up of excavator and wheeled loaders to increase competitiveness for all its utility equipment; to develop a super large excavator and to increase its status as a total construction equipment company. Secondly, it wants to localise key components through domestic component manufacturers, increase its own design capability of major components and offer cost competitiveness.
It also aims to provide better system development through the introduction of various stimulation programmes and an automatic digging operation control system; while the introduction of a test facility for cold weather operation and better technology to reduce noise, emissions and vibration are also planned. Finally, Hyundai wants to enhance design capability by improving structure analysis and developing an electronically governed engine.
Hyundai also intends to expand its overseas sales network by increasing the number of branch offices. Presently it has one each in the US, Belgium and Malaysia and two in China. By 2003 it wants sites in Panama and Canada, the UK, Italy, Spain, Turkey and Australia. It also wants to increase its number of overseas dealers from the current 159 in 69 countries to 210 in 92 countries by 2003, and to 300 in 145 by 2010. The number of after sales offices is also earmarked to almost double from 220 offices now to 400 by 2010.
Between now and 2010 Hyundai intends to more than treble its staffing levels from 1,160 to 3,795. A further breakdown shows that sales and administration personnel are to increase from 330 to 1,425, research and development staff from 140 to 470 and production labourers from 690 to 1,900.
Hyundai has also set targets for solving problems quickly. Currently 85% are solved in 24 hours, but the plan is for this to be increased to 97% between 2007 and 2010. This will be achieved by increasing parts availability; adding one distribution centre each in Canada, Colombia, East Europe and Singapore by 2003 to cater for the overseas market; having a proper parts inventory for all dealers and by recruiting a service manager and engineer in Latin America, Australia, South East Asia, the Middle East and Africa by 2006. Fast parts supply will also be increased to 97% from 85% currently by 2010.
Other initiatives include minimising machine down time, reducing repeat failures, improving service training, customer support and the parts supply system. Overall, Hyundai is confident that an increase in turnover of 700% over the next decade will be achieved.
So how confident is Hyundai of reaching the targets set out in 'Action Plan 2010'?
"In a short period since we launched this business in 1987, we have rapidly expanded our market shares both at home and abroad with sales growing steadily every year," said Yahng.
"Despite our late start in the business, we have made remarkable growth, providing more than 50,000 units up to now. The fast growth in such a short period of time reflects our long-standing commitment to providing quality service, as well as equipment tailored to international market conditions and needs.
"With Hyundai's spirit of creativity and exploration, with positive thinking toward the future, we are sure we will achieve our visionary 2010 plan."
Details were revealed to Plant Managers Journal last month at Hyundai's head office in Ulsan, Korea, of the business plan entitled 'Action 2010'.
To achieve its targets Hyundai will spend a total of £371m: £216m in facility investment by building a new manufacturing plant for machines and components at home and abroad; and £155m will be spent on extending its business to include telescopic handlers by 2003, backhoe loaders and off-highway dump trucks by 2006, and agricultural tractors, road machinery and tunnel boring machines by 2010.
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Currently, Hyundai lies 17th in the world market for construction kit with a 1% share, but the targets are designed to enable it to be 15th by 2003 with a 1.3% share, 11th by 2006 with a 2.2% share and fifth by 2010 with a 4.4% share. The firm is also aiming to increase annual turnover from £263m now to £690m by 2005 and £1.875bn by 2010.
Hyundai believes this can be achieved through:
l Market expansion by steady development of potential dealers in new markets.
l Increased productivity by joint out-sourcing, new value products and the setting up of overseas factories.
l Increased customer satisfaction by cyber-trade, enforcement of parts support and the other supporting strategies.
l Maximised turnover by diversification of product and optimised sales networks.
MS Yahng, general manager of HHI, said that its aim of becoming number five in the world was a realistic target. "It would not be easy to become world market leader in a comparatively short period as we only started our business in the latter part of the 1980s. After the realisation of our 2010 target, our next stage will be to work out the plans to become number one."
Yahng denied the plan was being launched because of the healthier position of the won (the Korean currency). "As the competition in the construction markets is getting increasingly fierce, we have started the plan to actively cope with the market circumstances and to secure the product competitiveness," he said.
The Korean giant has also revealed details of six other goals that it aims to achieve by 2010. First, is the development of new models. It plans a full line-up of excavator and wheeled loaders to increase competitiveness for all its utility equipment; to develop a super large excavator and to increase its status as a total construction equipment company. Secondly, it wants to localise key components through domestic component manufacturers, increase its own design capability of major components and offer cost competitiveness.
It also aims to provide better system development through the introduction of various stimulation programmes and an automatic digging operation control system; while the introduction of a test facility for cold weather operation and better technology to reduce noise, emissions and vibration are also planned. Finally, Hyundai wants to enhance design capability by improving structure analysis and developing an electronically governed engine.
Hyundai also intends to expand its overseas sales network by increasing the number of branch offices. Presently it has one each in the US, Belgium and Malaysia and two in China. By 2003 it wants sites in Panama and Canada, the UK, Italy, Spain, Turkey and Australia. It also wants to increase its number of overseas dealers from the current 159 in 69 countries to 210 in 92 countries by 2003, and to 300 in 145 by 2010. The number of after sales offices is also earmarked to almost double from 220 offices now to 400 by 2010.
Between now and 2010 Hyundai intends to more than treble its staffing levels from 1,160 to 3,795. A further breakdown shows that sales and administration personnel are to increase from 330 to 1,425, research and development staff from 140 to 470 and production labourers from 690 to 1,900.
Hyundai has also set targets for solving problems quickly. Currently 85% are solved in 24 hours, but the plan is for this to be increased to 97% between 2007 and 2010. This will be achieved by increasing parts availability; adding one distribution centre each in Canada, Colombia, East Europe and Singapore by 2003 to cater for the overseas market; having a proper parts inventory for all dealers and by recruiting a service manager and engineer in Latin America, Australia, South East Asia, the Middle East and Africa by 2006. Fast parts supply will also be increased to 97% from 85% currently by 2010.
Other initiatives include minimising machine down time, reducing repeat failures, improving service training, customer support and the parts supply system. Overall, Hyundai is confident that an increase in turnover of 700% over the next decade will be achieved.
So how confident is Hyundai of reaching the targets set out in 'Action Plan 2010'?
"In a short period since we launched this business in 1987, we have rapidly expanded our market shares both at home and abroad with sales growing steadily every year," said Yahng.
"Despite our late start in the business, we have made remarkable growth, providing more than 50,000 units up to now. The fast growth in such a short period of time reflects our long-standing commitment to providing quality service, as well as equipment tailored to international market conditions and needs.
"With Hyundai's spirit of creativity and exploration, with positive thinking toward the future, we are sure we will achieve our visionary 2010 plan."
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