Hyundai was founded by Chung Ju-yung and became one of largest conglomerate companies in South Korea. As a family-run Korean business group (chaebol), the most well-known Hyundai organization is the Hyundai Motor Company, the world’s fifth-largest automaker. Hyundai Heavy Industries is the world’s largest shipbuilder, and Hynix is a top semiconductor producer The Hyundai Group was established in 1947 with the initial construction company, named Hyundai Togun. After the Korean War, the company displayed spectacular growth and rapid expansion as a result of the postwar government-led reconstruction programs. Since its founding, it also expanded rapidly into car manufacturing, construction, shipbuilding, electronics, and financial services. The company was involved in the early stages of the country’s recovery following World War II. After the Korean War, development intensified, and Hyundai was quick to take on a key role, working on civil and industrial projects as well as housing programs. Consequently, Hyundai worked with the government in rebuilding the economy and formed an integral part of Korea’s economic strategy.
One of the most significant moves was made in 1975, when the group began constructing an integrated car factory. It was the foundation of South Korea’s largest auto company, one that was to dominate Korea’s home and export markets. The vehicle was launched in 1975.
By the following year, Hyundai was producing 30,000 cars, and by 1979 the total had risen to 110,000.
Hyundai kept expanding its business activities into more various areas. It created Dongsu Industrial Company, a construction-material manufacturer in 1975, and Seohan Development Company, a welding and electrode carbide maker in 1976. For trading arms of these companies, the group also set up Hyundai Corporation. At the same time, it created Hyundai Merchant Marine Company, which concentrated on cargo services, chartering, brokerage, and related services, and Koryeo Industrial Development Company and Hyundai Housing and Industrial Development Company, whose operations included construction design and property development. Hyundai also expanded into the business of precision industry, timber, and heavy and chemical industries, including iron and steel manufacturing.
Hyundai’s influence stretched far beyond the Korean peninsula as the company won contracts to build an expressway in Thailand and a major port in Saudi Arabia. Hyundai dominated the Korean market and quickly became a major player on the international scene. By the 1970s, Hyundai began to build vessels as well as shipyards and by 1986, Hyundai produced its first vehicle made entirely from Korean components. From the 1980s, Hyundai added additional specialties including the building of semiconductors and magnetic levitation trains.
Following the creation in 1983 of Hyundai Electronics, Hyundai stepped up its presence in the electronics field and produced semiconductors, telecommunication equipment, and industrial electronic systems. The group as a whole had proven itself capable of taking diverse markets and was determined to maintain and expand its markets by stepping up research-and-development spending focusing on technology.
The South Korean economy took a turn for the worse during the late 1990s. In order to restore the nation’s financial health, President Kim Dae Jung, who took office in 1998, launched a series of restructuring programs designed to reform the chaebols, many of which had become heavily debt-burdened. His reforms aimed at dismantling large, often corrupt, chaebols and included changing the ownership, business, and financial structures of the region’s large conglomerates. By this time, the Hyundai Group was responsible for approximately 20 percent of Korea’s gross domestic product. As such, its financial health was directly related to South Korea’s overall economic condition.
As a result of government pressures, Hyundai and other South Korean chaebols set plans in motion to sell off many of their businesses in order to pay down debt and shore up profits. Upon Chung Ju-yung’s death in 2001, much of the Hyundai Group was dismantled. In August 2001 nine core Hyundai companies, including Hyundai Engineering & Construction and Hynix Semiconductor, Inc. (formerly known as Hyundai Electronics Industries), left the chaebol. Hyundai Motor Co. was prospering as Korea’s largest car maker, but officially separated from the Hyundai Group in September 2000. After the separation, Hyundai Group focused on elevators, container services, and tourism to Mount Kumgang located in North Korea.
- Fundinguniverse.com,“HyundaiGroup,”www.fundinguniverse.com (cited March 2009);
- Hyundaigroup.com, “History,” www.hyundaigroup.com (cited March 2009);
- Matthew C. Keegan, “The History of Hyundai,” ezinearticles.com/?The-History-of-Hyundai&id=88548 (cited March 2009);
- Russell D. Lansbury, Chung-sŏk Sŏ and Sŭng-ho Kwŏn, The Global Korean Motor Industry: The Hyundai Motor Company’s Global Strategy (Routledge, 2007).
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