Q&Auto: Hyundai Veep talks transformation, Toyota, and woman drivers

Posted by hpayne on March 15, 2014

In the last decade Hyundai Corp. has gone from zero-to-hero in the U.S. auto market. Frank Ferrara, now executive vice president of customer satisfaction for Hyundai, is fourth from from left.

In the last decade Hyundai Corp. has gone from zero-to-hero in the U.S. auto market. Frank Ferrara, now executive vice president of customer satisfaction for Hyundai, is fourth from from left. (Hyundai)

In the last decade Hyundai Corp. has gone from zero-to-hero in the U.S. auto market. At the 2000 Detroit Auto Show I rolled up an imported Hyundai Accent’s windows with manual, door-mounted cranks. Since then, Hyundai has rolled up market share as one of America’s fastest-growing brands — producing polished, stylish vehicles like the U.S.-made Santa Fe SUV and Sonata sedan.

What happened? In part, Hyundai went native.

They put down roots in California, built a tech center in the Big Three’s backyard, hired good ol’ boys to build cars in ‘Bama, and recruited Toyota’s top American executives. One of those execs is Frank Ferrara, now executive vice president of customer satisfaction for Hyundai.

Born in Brooklyn, Ferrara was raised on the other side of the world from his Korean employer. Sixty-three years later, he is a key Hyundai honcho. Brooklyn’s got Seoul. The East River meets the Pacific. That’s a global automaker. Ferrara is head poobah for dealer customer service and parts activities. From the luxurious backseat of a Hyundai Equus cruising to a Phoenix strategy conference, the 28-year Hyundai veteran talked with me about transformation, Toyota, and woman drivers.

HP: Hyundai is perceived differently from a decade ago. How did that happen?

FF: It begins with our Chairman Mong-Ku Chung, who basically took over our corporation in 1997. It was his laser focus on quality. He elevated quality management to a president’s position by 2000 and within a couple more years elevated that to a chairman’s level so the quality guys really had the authority to say “Stop!” — we’re not launching this vehicle until we get this right. (Then) we won the J.D. Power quality award in 2004and that became a rallying cry for the entire corporation – a focal point that said here is what consumers want. We hired J.D. Power a long time ago and got them involved early in the vehicle development process to help us identify the issues in a vehicle that might not be consumer friendly. We’ve talked a lot about Toyota’s issues in recent years as they took their eye off the ball because they wanted to become #1 in volume. We’re going to focus on quality and the rest will come naturally.

HP: Hyundai followed Toyota’s model of building ‘em where ya’ sell ‘em. How has manufacturing in the U.S. changed Hyundai?

Ferrara: The reality is that unions in Korea are pretty tough. They really drove some of the activity to move production out. (Korea) had a number of years in the mid-‘90s where we had an annual strike. And you also had issues with currency fluctuations (and) a realization that we needed to get closer to the customers. We have design centers globally now — in Germany and here in Irvine as well as Korea. And once you get factories then you have quality teams in factories and . . . more people in the local market feeding back to corporate in Korea.

HP: How is the American consumer different?

Ferrara: We’re in the middle of this shift from the auto as a mechanical vehicle to being an electronic machine. Americans have a lot more content in (their) cars. There’s the old story about how Germans were criticized for not putting multiple cup holders in their cars. We live in our cars. We want to eat breakfast in our cars. And lunch and dinner. And women are a big part of our market. When I first started at Hyundai women didn’t drive in Korea.

HP: Is Hyundai looking for more U.S. opportunities? NASCAR for example?

Ferrara: The next big move for Hyundai is that we are entering the Mexican market. We’re going to sell in Mexico for the first time in May under the Hyundai name. Hyundai cars were sold under the Chrysler brand in the past. Some of those cars will come from Alabama.

HP: How about product?

FF: The new Genesis is absolutely killer. That’s a phenomenal step from where we were. We’re looking – like everybody else — at a small SUV, something under the Tucson.

HP: Hyundai has not followed the Toyota model in creating a luxury brand. Why?

Lexus is an anomaly. They are probably the only (Japanese) brand that really makes money. If you look at Infiniti and Acura, my guess is they aren’t making much money. You’re not going to sell enough cars to support an independent franchise. The real value of (luxury) cars is they add a halo effect to the Hyundai brand.

HP: Honda is an engine company. BMW is a style leader. What is Hyundai?

FF: We use to be a challenger brand. I’d say we have arrived.

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