"Hyundai Motor Group Must Overcome COVID-19 Economic Crisis Through Contrarian Innovation"

KB Financial Group Management Research Institute Report 'How Has Hyundai Motor Group Grown Through Past Crises?'

[Asia Economy Reporter Kangwook Cho] It has been argued that the current economic crisis caused by the novel coronavirus disease (COVID-19) should be overcome through the successful contrarian strategies of Hyundai Motor Group in the past. In particular, the financial industry is pointed out to be very similar to the automotive industry in that long-term decision-making and consistent execution are important.

According to the financial sector on the 24th, KB Financial Group Management Research Institute recently announced in a report that Hyundai Motor Group overcame crises by "pressing the clutch and accelerator more in a contrarian way" during difficult times.

First, during the 1997-1998 financial crisis, Hyundai Motor Group made a bold move by acquiring Kia Motors. At that time, the market feared simultaneous insolvency, but today it is regarded as one of the best mergers and acquisitions (M&A) in Korea.

During the internal crisis signs in 2005-2006, the group attempted a large-scale innovation strategy that fundamentally changed its constitution. They started global design and brand management, implemented comprehensive cost innovation strategies, bold product and quality innovations, and expanded overseas production.

Also, during the 2009 financial crisis, Hyundai Motor Group was able to leap to a global top-tier company through the effects of innovations attempted in the mid-2000s, as well as unique and bold contrarian marketing such as compensation during layoffs, aggressive dealer network expansion, and continued overseas investment.

Thus, Hyundai Motor Group overcame two major external financial crises and one internal crisis sign in the past, and rather took a step forward to grow into a global top 5 automotive group.

The report cited Hyundai Motor Group’s innovation success keywords as ▲fundamental constitution innovation and active benchmarking strategies ▲long-term decision-making and consistent execution ▲bold investment and meticulous prior preparation ▲customer-oriented paradigm shift and creative contrarian marketing ▲bold talent acquisition and autonomy guarantee.

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In particular, the report pointed out that through Hyundai Motor Group’s past innovation success, creative contrarian marketing strategies like Hyundai Motor’s can be found even in economic crises. It emphasized the need to consider what customers urgently need and to seek execution strategies that comprehensively consider profit, risk, and publicity effects from a mid- to long-term perspective.

Ultimately, the most important key to most innovation successes is increasing utility from the customer’s perspective, and long-term decision-making and consistent execution can be the driving force for sustainable growth in the mid to long term.

The automotive industry is a long-cycle capital goods industry. Top automotive groups such as Hyundai Motor Group, Toyota, and Volkswagen have commonly made decisions from a long-term perspective and continuously pursued them, steadily growing. The report explains that this fundamental characteristic is the same in the financial industry.

Cha Hee-geun, a research fellow at KB Financial Group Management Research Institute, said, "Looking at past cases, industrial paradigm changes from a long-term perspective did not easily change even after temporary financial crises or thereafter," adding, "The higher the uncertainty, the more it can be an opportunity from a long-term perspective."

He added, "Rather than solving partial weaknesses and problems individually, it may be more efficient to organically connect them and seek constitution innovation from a comprehensive and fundamental perspective."

This content was produced with the assistance of AI translation services.