Hyundai: Humble and Hungry

Don Sherman
Phil Wheeler

Hyundai's 2002 XG350 was no milestone of automotive progress. However, the first Korean car to venture beyond a $25,000 price left its mark when Automobile Magazine pitted that entry-luxury sedan against a similarly priced Mercedes-Benz C230 coupe. Back then, Hyundai was clawing its way out of the muck while Mercedes was trolling for bargain hunters.

The astonishing upshot of our comparison test was that the mighty Mercedes failed to trump the humble Hyundai.

Ever since Hyundai registered on our radar, we've watched its flight path mimic that of the space shuttle Atlantis:

In the past six years, Hyundai's market share in the United States has grown 75 percent, and it is now the sixth best-selling brand here.

In the teeth of the recession, Hyundai Motor Company became the world's fastest-growing carmaker.

Last year, Hyundai passed Ford to temporarily grab fourth place in the global pecking order (behind Toyota, General Motors, and Volkswagen).

During the past two years, Hyundai has been showered with praise. Flattering endorsements have been bestowed by Consumer Reports, Forbes, J. D. Power and Associates, the North American Car of the Year jury, Advertising Age readers, the Wall Street Journal, and even the EPA.

It was not always sweetness and light, however. When Hyundai arrived in the United States in 1986 with the $4995 Excel, it sold 168,882 vehicles, a record for any new importer. Unfortunately, the jokesters descended in packs when Excels began breaking down; the Hyundai name was decoded by some as "Hope You Understand Nothing's Drivable and Inexpensive."

Hyundai considered folding its tent in America, but in 1999, a new ten-year/100,000-mile pow ertrain warranty marked a turning point. According to Hyundai Motor America president and CEO John Krafcik, what was touted as the industry's best guarantee served as a clarifier for the engineering team by forcing them to design systems for "infinite life."

To ascertain how Hyundai became the darling of consumers and critics alike, we polled Krafcik and two key lieutenants instrumental in the company's recent success.

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