Hyundai Car (UK) Ltd

Summary

Hyundai Car (UK) Ltd has achieved a dramatic turnaround in profitability by creating a culture focused on achieving competitive advantage through service leadership. Key implementation frameworks have been the celebrated Harvard Business School's Service-Profit Chain and a six-step approach to change.

Introduction

Owned since 1994 by the automotive and support services giant Lex Services plc, Hyundai Car (UK) Ltd exclusively imports, markets and distributes cars manufactured in Korea by Hyundai Motor Corporation (which is not owned by Lex).

Headquartered in High Wycombe, Buckinghamshire, Hyundai Car (UK) Ltd has two customer sets. The first set are the independent dealers who purchase and sell the cars direct to Hyundai's second customer set, the car drivers themselves.

Hyundai has approximately 100 Lex employees with around a further 2000 people independently employed within its more than 160-strong dealer network. Instilling a strong ethic of customer service within these employee groups became the focal point of Hyundai's successful culture change programme.

The Need for Change

Culture change in Hyundai Car (UK) Ltd was driven by a need to dramatically improve business results. In 1993, for example, only 9200 cars were sold through the Hyundai dealer network, accounting for just 0.48 per cent of the UK car market. Dealers were making very low profits from new cars (thus focusing most energy into selling used cars) and their relationship with Hyundai Car (UK) Ltd was typical of the industry.

However, before achieving a revolutionary turnaround in both financial performance and dealer relationships, Hyundai's performance would get worse. In 1995 it reported a £7 million loss to Lex, thus calling into question Hyundai Car's future within the Lex stable. Hyundai Motor Corporation was equally wanting more from its UK distributor.

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