A SWOT Analysis of Hyundai Motors: 2024

Hyundai is a leading global brand of automobiles based in South Korea. The company is among the most prominent players in the automobile manufacturing sector and sells its products across 200 countries. It is known for its focus on innovation as well as product design and customer experience. The demand for electric vehicles has grown worldwide and Hyundai is heavily investing in expanding its portfolio of electric cars. The company has released a nice range of electric vehicles. It is also investing in innovation in other areas including autonomous driving, sustainable mobility, and future mobility as well as robotics.

Hyundai’s growth worldwide is driven mainly by its focus on customer experience and innovation. It is a highly competitive brand of automobiles that has introduced a vast lineup of vehicles including SUVs, cars and electric vehicles. The company also has a significant stake in another South Korea based automobile manufacturer - Kia Motors. Hyundai has also introduced Genesis - a brand that makes high end vehicles.

In this swot analysis of Hyundai, we will evaluate the main strengths and weaknesses of Hyundai as well as its opportunities and threats.

STRENGTHS:

Strong Brand Image

Hyundai’s strong and consumer friendly image is a key strength driving higher popularity and demand globally. The company has always focused on product quality, passenger safety and innovation. All these factors have contributed to a positive brand image which has helped the company cement its position in the global automobile industry.

Global Presence:

Hyundai is a South Korea based brand that has maintained a strong sales and distribution network which has helped it boost its global presence. The company sells its products worldwide in around 200 countries and territories. This has helped drive sales higher while also helping the company expand its customer base.

Strong Supply Chain and Manufacturing Network:

Its supply chain management has also played a key role in the success of Hyundai. The company has managed a strong and resilient supply chain and focuses on maintaining strong relationships with its supplier partners. Hyundai has also established a strong manufacturing network which includes its Ulsan plant that is the largest automobile manufacturing plant in the world. Focus on supply chain and manufacturing has helped the company keep costs low and achieve a solid competitive edge.

Strong focus on innovation and electrification

As a leading automobile manufacturer, Hyundai has maintained a keen focus on innovation. Apart from helping it overcome the competitive pressure, it has enabled the company to maintain strong global popularity and retain its market share. The company invests a large sum in research and development each year and has established a network of research and development centers worldwide to further innovation throughout the organization. Hyundai has also maintained a strong focus on electrification and experienced impressive growth in the sales of electric vehicles in 2023 compared to the prior year.

Diverse Product Portfolio

Another key strength of Hyundai which has helped the company maintain its market dominance in leading markets like India and China is its diverse product portfolio. Apart from sedans and hatchbacks, the company has also introduced a nice range of SUVs and MPVs. It has also focused on strengthening its portfolio of electric vehicles. In the Indian market, its best selling cars include Creta, Exter, Venue, Verna and i20. The diverse product portfolio of the company helps it cater to the differing preferences of various customer segments and maintain higher customer loyalty.

Strong reputation in terms of vehicle safety

Hyundai is also among the most preferred brands in terms of passenger safety. It has received several awards and recognitions for safety and performance. According to a February 2024 report, IIHS (Insurance Institute of Highway Safety) has awarded 16 models from Hyundai Motor Company, Kia Corporation, and Genesis, with the prestigious IIHS 2024 TOP SAFETY PICK (TSP) and TSP+ awards in its annual assessment which was the highest of any automaker. While Hyundai Motors and Genesis earned seven awards each, Kia Motors also earned two awards.

WEAKNESSES:

Weak Position in the US Market:

Hyundai has a strong position in the global automobile sector. However, it is not among the top brands in the United States market, one of the largest automobile markets in the world. Ford, Toyota, Chevrolet and Honda feature at the top in this list, while Hyundai is at the sixth position even below Nissan according to Statista.

Declining Market Share in China:

Hyundai had remained a leading player in the Chinese market. However, the rise of local brands has led to a fast decline in its market share in China over the past several years. Its market share in China has kept falling from above 7%. In 2022, its market share in China fell to close to 1% only. Both Hyundai and Kia are seeking to boost their market share in China. However, they are facing intense competition from the local automobile manufacturers there.

Product Recalls:

Hyundai has made multiple recalls recently. According to news reports, it has again recalled more than 67,000 vehicles in July 2024 over equipment malfunction. Such product recalls can hurt the company’s brand image over time. According to the NHTSA, Hyundai is recalling up to 54,647 vehicles due to loss of drive power from fuel pump failure.

OPPORTUNITIES:

Emerging Markets:

While Hyundai’s performance in the leading markets like US and China has not been as strong, the company has excellent opportunities in the emerging markets where people seek stylish and yet affordable mobility options. The company has been performing well in India and South Korea. It can find faster growth by focusing more on the other emerging markets too.

Electrical Mobility:

Hyundai is strongly focused on the development of electric vehicles which is an area full of opportunities. Worldwide the demand for electric vehicles has grown a lot and the company has experienced growth in the sales of electric vehicles in 2023 compared to the prior year.

Autonomous Driving:

Hyundai is also investing in making its autonomous driving technology better and more efficient. Investing in autonomous driving can also help the company grow its popularity and demand. Several of Hyundai models are already equipped with some smart autonomous driving features and the company expects to have made significant progress in this area by 2030. Hyundai cars like Santa Fe are already equipped with Smart Sense features to offer higher driver safety.

Robotics:

Hyundai Motors is also investing in Robotics which is another area full of opportunities. It has already acquired a controlling interest in Boston Dynamics, a leading robotics firm. Hyundai has also made significant progress in service robotics and wearable robotics.

THREATS:

Competitive Pressure:

Hyundai is facing strong competitive pressure from several brands including Ford, Toyota, General Motors, Honda, Nissan and others in the global market. Higher competitive pressure has led to increase in innovation and marketing related costs. In the Chinese market too, the company is facing strong competitive pressure from the local brands. Due to the intense competition in the market, the company has experienced growth in its operating costs.

Regulatory Pressures:

Legal and regulatory pressures are also adding to the challenges faced by Hyundai Motors. The company made several recalls this year. Worldwide, the company needs to remain compliant with several types of laws including those related to product quality, safety, labor etc.

Geopolitical Factors:

Geopolitical factors can also add to the challenges faced by Hyundai Motors. They can cause supply chain disruptions and other similar challenges affecting sales and revenue. Following the Russia-Ukraine conflict several automobile brands including Hyundai have left Russia and been forced to sell their plants and other facilities there at very low prices.

Supply Chain Challenges:

Supply chain management is also a highly challenging area for automobile businesses like Hyundai. The pandemic disrupted international supply chains and its impact has continued to affect automobile businesses. Managing the supply chain would continue to remain a challenging area for Hyundai.

CONCLUSION:

Hyundai is among the leading players in the global automobile sector. It has enjoyed impressive sales growth in 2023 compared to the prior year. The company has also experienced impressive growth in the sales of electric vehicles. Hyundai continues to enjoy growth driven by its focus on innovation as well as performance and passenger safety. It has also earned several awards and recognitions for its strong focus on safety. However, the level of competition in the automobile industry has continued to intensify leading to increased operating costs and a need for higher focus on innovation and marketing. Hyundai is also investing in autonomous driving technology apart from EV technology and Robotics to find superior growth. It has maintained a strong competitive position in the automobile sector and has strategically invested in areas that can help it expand its market share faster in future.