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Tuesday, January 22nd, 2008

Participants were given an impression of the performance capacity of the company and South Korea. The next VIP Tour starts in the spring of 2008.
Between 28 October and 4 November 2007, 159 dealers and customers from Europe, South Africa and Israel, were invited to visit South Korea by Hyundai. And they were rather amazed at what they got to see, because the Hyundai Corporation is omnipresent in this East Asian country.
From a European viewpoint, the Hyundai brand does not yet play a major role, both in the market for automobiles and for construction machinery. This is completely different in the home country. Regardless of whether it concerns personal cars, buses or lorries, the streets are crowded with Hyundai vehicles. Large hotels bear the name of this enterprise, just as much as department stores. And besides this, Hyundai also operates a University Hospital, a University, sports, cultural and educational centres, it constructs buildings and ships, including marine engines and generators, it produces complete power plants and industrial facilities and, last but not least, construction equipment and forklift trucks.
The organisation of a VIP trip to South Korea with customers and dealers, so that they can obtain a first-hand impression of the performance capacity and productivity of Hyundai and can gain confidence in our enterprise for the European market in the process, is self-evident. The Management Board of Hyundai Heavy Industries (HHI), which produces construction machinery and forklift trucks in one of its six corporate divisions, had extended this invitation. The reaction of the participants showed throughout that this had been an excellent idea.
As the host, Hyundai had put together an attractive and informative programme package. The first station was Ulsan, also called “Hyundai City”, where the corporate headquarters of HHI are located. Here the visitors were able to gain an impression of the gigantic shipyard, which completely covers a peninsula. The enterprise is globally the No. 1 in ship construction, with a share of approximately 15% of the total market and even up to 40% in case of large container ships. At the same site, Hyundai Motors and its 34,000 employees build approximately 1.6 million automobiles per year, 1.1 million of which are loaded via its own shipyard and delivered worldwide. In addition, the Group affiliate Kia produces another 1.2 million vehicles. Together, both companies plan to exceed the mark of 4 million vehicles within the near future.
Dealers and customers of Hyundai Heavy Industries Europe were of course especially interested in the Construction Equipment Division, which manufactures excavators, wheel loaders and forklift trucks. Here HHI has been able to achieve impressive growth rates. Turnover in this segment, for instance, climbed from USD 56.5 m in 2002 to USD 1.525 bn by 2006, and once more to USD 2.100 bn. in 2007.
With its construction machinery and forklift trucks, the enterprise has gained a worldwide market share of 7%, and 6.1% in Europe. Marketing and sales proceed over a network of 269 dealers, of which 64 are located in Europe and 71 in the USA. A comparable dealer network was established for its Material Handling department.
In Europe, the sale of machines has grown by a factor of more than 10, rising from 250 units in 1995 to approximately 3,000 units in 2005. And in 2006, sales figures took another leap to approximately 2,700 machines and 1,500 units of forklifts, or a total of 4,200 units of construction equipment. Turnover at the same time climbed to EUR 230 million. This meant an increase of a good 40% in comparison to the preceding year for both sectors.
HHI will stabilise and continue this growth pattern. The dealer network is to be expanded for this purpose, and new machines will be brought to market. As a part of this policy, the company has announced the introduction of a completely new machine generation, the so-called “9er series”, which will be launched between the years 2008 and 2009. Also in 2009, the popular “zero tail” construction series is to be expanded by three machines, adding 8 t, 11 t and 14 t equipment units. In addition, an excavator-loader is to be added to the programme.
A tour of the production workshops shows that the potential for this is definitely available. State-of-the-art methods are used here, including 20 welding robots of a Hyundai design. The manufacturing facilities meet the highest quality requirements and obviously make an excellent impression, especially with regard to process control and organisation. The division for excavator assembly has an output of more than 13,000 units per year, to which are added another 3,000 wheel-loaders. The production line for mini-excavators has an output of just under 2,000 units, while more than 5,400 forklifts are produced each year.
Steel is required for building excavators. So it is only natural that the visitors from far-away Europe are also shown the supply source of this raw material, especially since it is very worthwhile seeing. Hyundai receives its steel from Posco, a nearby factory that is one of the leading steel manufacturers of South Korea. This company, which was founded in 1968 and has two factories that were erected in 1973 and 1983, disposes over a highly modern steel production facility. With a planned output of 50,000 tonnes of raw steel for 2007, Posco is a major player in the world market, and Hyundai is its largest customer in the domestic market.
A visit to the training and replacement parts centre of Hyundai in Eumsung completes the professional part of the programme. Here the participants in the VIP Tour were greeted with much applause by the employees, and were subsequently treated to an impressive demonstration of various machines. The working and driving performance of the newest generation of excavators and wheel-loaders was demonstrated on the spacious test terrain. Subsequently, the guests were given the opportunity of taking a seat in the cockpit and directly “experiencing” the advantages for themselves. A final walkabout in the training centre and the replacement part warehouse gave a graphic impression of the importance that Hyundai places on after-sales service.
When visitors travel more than 10,000 km, then their visit should not be limited to a purely professional programme. Hyundai took this into account and offered its guests an attractive accompanying programme, which was designed to let them gain an understanding of South Korea’s 5,000 years of culture and history. Besides historical temples and palaces, the modern Korea was certainly not forgotten. Especially the capital city of Seoul, a dynamic metropolis of 10 million inhabitants, memorably impressed the participants with its high-rise buildings, the busy activities of its business and banking centres and also its markets in the old city centre – another highlight in the VIP tour, which had been perfectly organised by Hyundai.
There is one thought that everyone took back home with him: If one knows that South Korea had been considered one of the poorest countries of the world up to the 1960s, and if one then compares this with today’s cultural and material wealth, then it becomes clear what performance the country and its people are capable of. Its modern industrial facilities are usually not older than 30 years. And there exists a gigantic economic potential here. And this small country, qua size approximately as large as Hungary, still has a way to go in gaining its true place in the markets of the world. Products from Samsung or LG are today already leaders in the area of electronics and IT technology. Also the products of Hyundai, including its cars and construction machines, are increasingly trusted and recognized for their quality, high value and cost-effectiveness. The VIP Tour 2007 was a right and important step in this direction.
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