Hyundai Swot Analysis

SWOT analysis for Hyundai Motor Limited.

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Strengths:

1) Excellence in vehicle safety and design proven by many awards:

• HYUNDAI is considered to be one of the safest car brands in the world. The company has made significant improvements to the cars safety features and has been awarded the safety awards.

• In addition to HYUNDAI’s efforts to improve its cars’ safety features, the company also stepped up in its design efforts. In 2015, HYUNDAI’s Sonata, Genesis, Elantra, i20 and Tucson models have been acknowledged as the best in design, earning Red Dot Design, Good Design and Product Design Awards. In total, the company has earned more than 20 design awards over the last 6 years.

2) The 6th most reputable

Poor brand portfolio, leading to fewer sales

HYUNDAI is among the top 5 largest auto manufacturers, but has one of the poorest brand portfolios. The company sells only HYUNDAI and Kia brands, while Volkswagen sells 12 different brands, General Motors 9, Chrysler 8, Toyota 4 different brands. Only Ford sells the same 2 different brands as HYUNDAI. Fewer brands lead to fewer customer segments that can be satisfied and as a result, the company’s earnings suffer.

2. Low presence in the strongest U.S. vehicle market and no presence in Japan’s vehicle market

The U.S. market is the leading vehicle market in the world with 21.5 million units sold in 2015 alone. The market has plenty of opportunities for such high profit vehicles as pickup trucks, electric and fuel cell vehicles. Yet, HYUNDAI wasn’t even among the top 5 car manufacturers and sold less than 10% of the market units.

HYUNDAI also has no presence in the Japanese vehicle market, after the company pulled out of it in 2009. This is a major weakness as Japanese vehicle market is among the top 10 vehicle markets in the

4. Product recalls damaging brand reputation

Over the last few years, HYUNDAI has issued vast product recalls. In 2015, HYUNDAI recalled 470,000 Sonata’s to fix engine problems and an additional 305,000 vehicles to fix braking light problems. In 2016, the company has already recalled more than 170,000 vehicles in the U.S. alone. The company has also recalled more than half a million vehicles in 2014. A high number of recalls damages consumer trust of the company’s brand and adds to negative publicity. Both result in lower revenue and operating profits.

Opportunities:

1. Improving U.S. economy

Signs of an improving economy and rising consumer confidence have been reflected in the strongest increase in new vehicle sales for more than a decade in the U.S. market. 17.5 million new units were sold in 2015, a 5.7% increase over 2014. Interest rates in the U.S. have been low for several years and are forecast to remain that way for the foreseeable future. HYUNDAI has an opportunity to capture the higher market share and increase sales in such economic