Hyundai and Hankook Manufacturing Companies - Essay Example

Hyundai and Hankook Manufacturing Companies The motor car industry comprises many players who operate in various geographical regions. Due to the desire to reach remote market and fetch good profits, particular motor companies extend their operations by investing in remote markets to reduce extra costs that may involve ferrying of their products to far markets. Competition is a common factor that every company faces at every level of operation. In order to strengthen competitive power, motor companies and auto related products tend to employ unique technologies that can enable them to survive in the market. Some have also relied upon their specific governments to protect them from competition caused by new entrants. The Hyundai motor company is one of the companies that face competition from other auto manufacturers. Hankook is also an example of a universally known company dealing with auto related products like tires and spare parts. Hyundai Motor Company came into existence in 1968. Upon its establishment, the company merged with Ford Motor Company with the aim of filtering technology for building ships. Upon parting ways with Ford motor company, Hyundai Motors collaborated with the Mitsubishi motor company of Japan that helped in the manufacture of Pony, the first small passenger car with an engine power of 1500cc (Lansbury et al 2007, 51). In the reports of Lansbury et al (2007, 51), the success of the Pony model in the markets of Korea lifted the position of Hyundai Motor Company to the best position among other motor manufacturers in Korea. Impressive performance of Pony in the market motivated further innovation that led to the manufacture of Pony II version in 1973. Good features associated with the Pony model enabled Hyundai to penetrate the Canadian market, where it made high sales. With the continued partnership of Mitsubishi and Hyundai, Hyundai produced other stellar, a new model with the brand name of engine power 1597cc in 1982. In 1985, Hyundai Motors released the Sonata model with an engine power of 2000cc and later in 1990 the company produced Elantra model that had an engine power of 1800cc. According to Lansbury et al (2007, 51), the impressive features of the excel model enabled Hyundai motors to penetrate and market its cars in America by 1986. The performance of Excel in the American market made Hyundai Motors to clinch position three among the best performing foreign companies in America. The partnership between Hyundai motors and Mitsubishi Motors provided Hyundai with more technological knowhow that assisted Hyundai to increase the rate and volume of production thus keeping the company top of other car manufacturers in Korea. In the view of Lansbury et al (2007, 57), the association with Mitsubishi enabled Hyundai motors to gather managerial skills that helped in boosting production volumes. Mitsubishi motor company also introduced Hyundai motors to the technology of using computers in designing and manufacturing of cars. Hyundai Motor Company also gathered the technological knowhow of managing wastes and applying scientific knowledge in managing manufacturing of cars. Computer technology also helped the Hyundai in cutting production costs by reducing human labor while maintaining high quality and quantity of production (Lansbury et al 2007, 57). Mitsubishi was also involved in the initial designing of cars for Hyundai. Lansbury (2007, 53), affirms that the collaboration of Mitsubishi motor company and Hyundai motor company helped in technological transformation and improvement in cars produced by Hyundai Motors. The partnership of Hyundai Motors and Mitsubishi Motor Company led to introduction of robots to facilitate the speed of production as well as reducing the costs of production. The rigorous development of Hyundai Motors is closely linked with the industrial policy set by Korean government that prohibited importation of cars from outside the country. This policy illustrates the favor Hyundai Motor Company obtained from the government (Lansbury 2007, 51). The government also allowed cheap interest loans to Hyundai Motors from state banks and financial institutions, a move that stabilized financial position of the company. The Korean government worked to protect Hyundai from financial threats thereby setting it as one of the best motor companies in Korea. During the financial crisis that struck Korea before 1998, Hyundai hasted towards buying the rights of Kia Motors, which was facing liquidation. The move to buy Kia Motors was a strategy used by Hyundai motor company to block any latecomer into the market. The management of Hyundai feared competition that could result from external companies that could use the fall of Kia Motors to enter the market. In the views of (Lansbury 2007, 54), Hyundai enjoyed a monopoly status in Korea bearing the protection offered by government with regard to imports Hankook Tyre Manufacturer Company Hankook tyre manufacturer is one of the global high ranking companies based in Korea. Hankook has adopted bright technology that has created and increased demand for its products. The company manufactures high performance tyres for a wide range of vehicles. Hankook Tyre Manufacturers has invented the ultra high performance tyres that can reduce amount of fuel consumption by reducing resistant force on the wheel of the cars. In addition, Hankook employed the technology of Hankook hybrid system that increases durability of tyres by facilitating the splitting of silica into small pieces. In the reports of Gross (2011), Hankook Tyre Company invented the Ventus RS2 that is efficient for high racing cars. Plunkett (2006), reports that the Michelin Tyre Group and Hankook Tyre Manufactures struck a deal of strategic partnership that has been beneficial to Hankook as it uses the name of the best performing Michelin to market some of its tyres. Hankook has also gone ahead to invent an impressive Ventus Aero designed for sporting cars. The Ventus aero is ought to have capabilities to provide extra down force for a car moving at high speed. According to Shameen (2011), the technology employed by Hankook in the production process has helped in the cutting of production costs that have ensured low costs of tires yet at right quality and quantity. High innovation in the Hhankook Tyre Company has provided the company with high competitive advantage in broad field of Tyre Manufacturing. With this technology, Hankook has managed to occupy the seventh position among the best performing tyre companies in the world (Shameen 2011) The rapid growth of Hankook Tyre Company in Korea in 1947 attributes to government policies on the need to promote industrialization in Korea. The Korean government offered tax subsidies to manufacturing companies, a move that helped in cutting costs of production thereby increasing stability of the manufacturing companies. The government of Korea also offered incentives and indirect infrastructural development to the growth encourage of local industries (Mah, 2007). Bibliography Mah, J., 2007, Industrial Policy and Economic Development: Korea's experience, http://findarticles.com/p/articles/mi_qa5437/is_1_41/ai_n29325864/ Plunkett, J., 2006, Plunkett's Automobile Industry Almanac 2007 (E-Book): Automobile, Truck and Specialty Vehicle Industry Market Research, Statistics, Trends and Leading Companies. Houston, Texas; Plunkett research publisher. Gross, A., Ita, P., 2011, Industry corner: world rubber and tire - Industry Overview, http://findarticles.com/p/articles/mi_m1094/is_n1_v30/ai_16349041/pg_2/ Mobile Tires Company, Hankook, http://www.mobiletirecompany.com/Tire-Brands/Hankook-Tires.aspx Moon, H., & Cho, T., 2000, From Adam Smith to Michael Porter: evolution of competitiveness theory, London; World science publishing Co. Lansbury, D., et al, 2007, The global Korean motor industry: the Hyundai Motor Company's global strategy, New York, Taylor & Francis Publisher. Shameen, A., Getting to Know Hankook, http://online.barrons.com/article/SB50001424053111903337604576455960732892404.html Read More