Hyundai Motor Company in China

At the turn of the 21st century, Korea’s Hyundai Motor Company (HMC) announced ambitious plans to become a global leader in the automotive industry. It established plants in Europe, India, and North America, and in 2002, turned its attention to China, one of the world’s largest and fastest growing economies. Growing demand for automobiles spurred forecasts that China would become the world’s third-largest automobile market–even as the worldwide auto market was stagnating. Thus HMC had selected China to serve as its largest, lowest cost assembly and manufacturing base. HMC created a separate China Business Division and in 2002, initiated a joint automotive project with Beijing Automotive Industry Holding Corp. (BAIC) that became “Beijing Hyundai.” A number of the world’s major auto makers were already established in the Chinese market and were skeptical of Beijing Hyundai’s chances. Undaunted, however, Beijing Hyundai rapidly established itself in the Chinese market, growing faster in its first few years than any other automaker in China. This case explores the challenges that Beijing Hyundai faced in serving as the cornerstone of HMC’s global expansion strategy.