Do you remember your first Hyundai? Could it be one of the first ones sold here in the USA?
It was only twenty-eight years ago when the first Hyundai Excel sold in the States. That year, Hyundai sold 168,882 of the compacts – a strong showing thanks to sharp marketing and a base price of under $5,000.
On the occasion of the launch of the 2015 Sonata, I had the opportunity to catch up with Mike O'Brien, Vice President of Corporate and Product Planning at Hyundai Motor America to reminisce about the early days of the company. O'Brien first arrived at Hyundai's Orange County, California offices in 1987 and is in his second stint with the company. Looking back, O'Brien recalled that Hyundai Motor America had "[a] lot of high energy people. It was a startup, very entrepreneurial spirit company at the time. Folks were very eager to move things along and get that product out on the market. Of course, find dealers to distribute it and service it and take care of those customers during that select time. Anyway, it was a time of a lot of energy, a lot of excitement, and a lot of rapid growth."
The excitement and growth had a prelude. Before the first Excel was sold in the USA, Canada had the first crack at the Korean automaker in the early 1980s. It just seemed that Canadians were snapping up every Pony and Stellar that came out of the port in Vancouver. Considering its Canadian success, Hyundai opened up shop in the USA. As stated before, the first year stateside was a huge success.
The next year – 1987 – Hyundai hit the 250,000-unit sales mark in the U.S.A. for the Excel. Think about this, Hyundai sold as many Excels equal to the entire annual volume of BMW or Mercedes-Benz in this country today. The next year, Hyundai sold just a few units short of their record – even with the late introduction of a second model, the 1989 Sonata.
Back then, Hyundai went by the slogan "cars that make sense." In essence, they did. They reached the right audience at the right time. Hyundai gave those who wanted a new car a chance with affordable pricing and high equipment content.
It was in 1987 where my place in this history almost took place. At that time, I was looking for cheap transportation, especially when I was moving from Reseda to San Rafael. I thought about this – could I move what was left of my worldly goods in the back of a Hyundai Excel GL 3-door hatchback…or, a base compact pickup? Who would even finance me?
The deal was in the works through a Hyundai dealer in Culver City, as they waited for Chrysler Financial to approve my credit. I have yet to drive the Excel to see whether it would be the right move for me. Then, my mind switched to the pickup. I ended up with a new Nissan Hardbody pickup with an automatic transmission…and high monthly payments. The Nissan dealer in Woodland Hills took the 1979 Mazda 626 in for the trade.
My father told me to "never invest in retrospect." In this case, I consider this a major regret. Without going into details, I returned the Nissan back to the bank and called it a day. I wonder if history would have been kinder if I bought the Excel instead.
By 1989, Hyundai encountered a snag in their success. "It did continue, of course," O'Brien recalled, "until quality problems start popping up and our customers realized that we needed some work to do."
Sales did struggle well into the 1990s, even with more models available alongside the Excel. The model lineup of two became four by the end of the decade, including a compact sedan and a coupe. That compact sedan came mid-decade and wore a familiar name – Elantra. It not only closed the gap between the Excel/Accent and the Sonata, the car was a beacon as to what would come in the next several years afterward. The Scoupe and subsequent Tiburon brought performance to the brand, achieved by adding a turbocharger to their current engine. One constant remained throughout the lineup – you can still get a Hyundai at a relatively lower price against its competition.
Yet, Hyundai kept on going in this country. "One thing that is a common thread today, or yesterday, or back then in 1987 is determination," said O'Brien. "The folks that work for our company in Korea and our engineering centers around the world have an unbelievable energy and determination. If you look at that period up through when our sales started growing again around 1998 it was all about a determination to make a better car. It was about top management's commitment to invest a lot of money and resources in making the best quality car they can make."
In the backdrop of jokes referencing the company's products with their perceived quality issues, Hyundai Motor America rolled out a very ambitious warranty program. Sales were at its lowest in its history – just 91,217 units were sold in 1998. A ten-year, 100,000-mile warranty was applied to the drivetrain on every Hyundai sold since that time. It was a statement that was met with some doubt to question whether Hyundai was serious about improving the quality of its products. "If we weren't serious about offering America's best warranty on a car that would have a problem or two is not a great way to stay in business," said O'Brien. "We had to back up our talk."
The response to the new warranty, along with reports of improved quality, resulted in a jump in sales. In 1999, sales in the U.S.A. jumped 78.9%. This momentum contributed until 2008 when another problem hit the entire automobile industry – the global economic crisis. With job losses mounting and the economy in a long-term stall, Hyundai came up with another innovative solution that would provide protection through tight economic times. The program is called Hyundai Assurance program. Between the 10-year warranty, providing roadside assistance and other amenities for their vehicles, Hyundai had one driving factor for providing these services to their customers. O'Brien said it best: "[I]t was about the basic theme of 'got your back.'" This continues today with an expanded Assurance program that now includes guaranteed trade value.
The progression of Hyundai coming from the establishment of "America's Best Warranty" has been one to watch. It took one risky move to show the company's "determination" to succeed. Yet, I was skeptical. That also came from experience through perception.
From the 1980s, I rented cars to fill my transportation gaps and travel desires. Prior to 1998, I would refuse to take a Hyundai for a rental. Would I be the one to experience a bad rental because I drove a Hyundai? From 1998 onward, I accepted Hyundais as rentals and found them to be better built than perceived. Like the rest of America, the tide had turned with my experience with Hyundai's automobiles.
That notion was also reflected by the people around me. In places, such as DC, Madison, and the Twin Cities, friends and acquaintances began buying Hyundais. My brother and his family owned an Elantra hatchback from the early 2000s. It showed the trust people had in the brand, as quality improved while the support from the company remained strong.
Hyundai has also played a key role in this work. Two V&R Vehicle of The Year awards were earned by two generations of Sonatas. One of the first cars I reviewed from a media fleet was a 2011 Elantra GLS sedan. For every vehicle introduced by Hyundai in the past few years, the bar was raised in terms of quality, content, performance, and economy.
Looking back on where Hyundai came from, you could see the company's "determination" to succeed by having our backs every time we receive the keys to a new Sonata, Genesis, Santa Fe, Veloster, and so forth. Success is an easy thing to do, but not without a strong backing from an entity that cares about the product.
This is where we are at. Hyundai is a mainstream brand offering a variety of products for every budget. It has a global reach that keeps it up front with the competition. To think it arrived here with one car, a great price, and a catchy slogan. They made sense then; they continue to do so – even more than ever.
DISCLAIMER: In regards to the interview for this article, event logistics and some travel were provided by Hyundai Motor America.