From Pony's Challenge to Genesis' Turnaround... A Milestone of 18 Million Vehicles Sold [Hyundai's 40 Years in the U.S.]

Chung Juyung pushes ahead with the "X-car project" in a contrarian move
Pony Excel becomes No. 1 imported compact car in the U.S. in 1987
"Quality management" champion Chung Mongkoo bets on bold warranty program
Hyundai surpasses Toyota in new-ca

Editor's NoteThis year marks the 40th anniversary of Hyundai Motor Company's entry into the United States. The U.S. expansion became the solid foundation on which Hyundai Motor Group grew into the world's third-largest automaker in name and reality. Looking back, Hyundai Motor has left behind the image of being cheap but low-quality and has now established itself as a frontrunner leading the era of future mobility. This article traces that journey.

In February 1986, a ship carrying Hyundai Motor Company's compact sedan, the Pony Excel, arrived at the Port of Jacksonville in Florida, United States. It had taken nearly a month to cross the Pacific after departing from Ulsan Port. The ship carried only about 1,000 vehicles, but it was a symbolic moment marking the first step of Korea's automotive industry into the world's largest market.

Starting with this first export, Hyundai Motor has steadily expanded its sales base in the U.S. market over the past 40 years. Since 1986, the company has exported a total of 11,449,280 vehicles to the United States, and when local production volume is included, cumulative sales reached 18,033,943 units as of January this year. If all of these vehicles were lined up bumper to bumper based on the length of the Avante (Elantra), they would stretch 84,600 kilometers, more than enough to circle the Earth twice.

The 40 years since entering the United States encapsulate Hyundai Motor Group's very process of rising to become a global automaker. After an initial phase in which it was harshly criticized for its low-price, low-quality image, the company gradually built up quality competitiveness and brand trust, laying the groundwork to firmly establish itself among the world's top three car manufacturers. Its electrification and future mobility strategies have also been fully developed on the back of this accumulated experience in the U.S. market.

In the early years of its U.S. expansion, Hyundai Motor led with imported compact cars promoted for their strong "value for money" (price-to-performance), but it soon became mired in severe quality controversies. In the 2000s, the company made quality its top priority and slowly regained trust, and in the 2010s it expanded into the premium segment, enhancing its overall brand image. The 40-year history of Hyundai Motor in the United States is not just a record of exports; it is a series of renewed takeoffs in which the company repeatedly changed course in times of crisis and elevated its status step by step.

February 1986, Poni Eksel being unloaded at the Port of Jacksonville, Florida, USA, after a voyage of about a month. Photo by Hyundai Motor Company

'X-Car': Chung Juyoung's Challenge

Project name: "X-Car." It was the project that Hyundai Motor, on the brink of bankruptcy, pursued as a matter of corporate survival. Hyundai's entry into the United States began with this project. The Pony Excel, codenamed "X-Car," was developed from the outset with the U.S. market in mind. The vehicle's layout was changed to the front-wheel-drive configuration preferred by American consumers, and Hyundai entered into a technology partnership with Mitsubishi to meet the stringent U.S. safety regulations and ratings.

The early stage of the "X-Car Project" in 1980 coincided with the second oil shock, when soaring exchange rates and interest rates shook Hyundai Motor as well. Business conditions deteriorated to the point that the mass-production project risked being scrapped. In this situation, the late founding Chairman Chung Juyoung instead opted for a contrarian move, ordering a massive capacity expansion. In February 1985, just 3 years and 5 months after construction began, Hyundai Motor completed a new plant with an annual capacity of 300,000 units. Combined with its existing 150,000-unit capacity, the company secured a large-scale production capability of 450,000 vehicles per year.

Chairman Chung believed that without gaining recognition in the United States, the center of the global auto market, Hyundai Motor would find it difficult to grow into a truly global company. The plant expansion was therefore a preemptive investment premised on entering the U.S. market. In December of the same year, the Pony Excel received notification from the U.S. Environmental Protection Agency (EPA) that it had passed emissions testing, opening the door for exports.

The late Chairman Chung Juyoung attending the 1985 Pony Excel new-car launch. Provided by Hyundai Motor

The initial results exceeded expectations. In its first year of exports, the Pony Excel achieved sales of 168,882 units, far surpassing the original target of 100,000 units. The following year, 1987, it became the best-selling imported compact car in the U.S. market. The 263,610 units sold that year still stand as the all-time record for imported compact cars.

This success was the result of a combination of strong product attributes, price competitiveness, and a dealer strategy tailored to local distribution networks. In 1986, U.S. business magazine Fortune selected the Pony Excel as one of the "10 Best Products of the Year," calling it "the fastest-selling imported product in history."

Chairman Chung regarded the Pony Excel not merely as an automobile but as a symbol carrying the image of Korean industry. He said, "An automobile is a flag on wheels. The image of a country that can produce and export cars on its own leads people to rate the technological level of all its other products more highly."

Chung Mongkoo's '10-10 Strategy'

The success of the Pony Excel did not last long. Problems with both quality and after-sales service emerged one after another. Hyundai Motor began to be treated as a maker of "cheap but low-quality cars."

Honorary Chairman Chung Mongkoo was deeply shocked by this. In 1999, he made a do-or-die move: Hyundai Motor abruptly introduced a "10-year/100,000-mile" powertrain warranty in the U.S. market. Considering that rival automakers at the time typically offered warranties of about 2 years/24,000 miles, this was more than bold; it was a gamble.

If the underlying quality did not support it, the company could have faced astronomical recall costs. Honorary Chairman Chung put "quality management" at the forefront, instilling a sense of urgency throughout the organization, from design and production to supplier management. If quality was not assured, new model launches were postponed. A quality control situation room was set up on the first floor of headquarters, where he frequently chaired meetings and drove employees hard.

Chung Mongkoo, Honorary Chairman of Hyundai Motor Group, inspects the production site at Hyundai Motor's U.S. plant in Alabama in 2014. Photo provided by Hyundai Motor Group.

The transformation showed up in the numbers. In 2004, five years after Honorary Chairman Chung fully embraced quality management, Hyundai Motor surpassed Toyota in the Initial Quality Study (IQS) conducted by U.S. market research firm J.D. Power. At the time, U.S. media expressed their astonishment with headlines likening it to "a man bites dog" story. The achievement came from rigorously reflecting every one of J.D. Power's findings each year and relentlessly improving quality.

As quality management came into full bloom, U.S. sales also soared. Annual sales, which had fallen to around 80,000 units in 1999, jumped to 850,000 units in just five years, more than a tenfold increase. The quality-improvement know-how accumulated during this period became a key driver that helped Hyundai Motor Group break into the global top five automakers in 2009.

'Fastest-Growing' Genesis Turns the Tide

The premium brand Genesis created a new turning point in Hyundai Motor's U.S. story. Genesis has established itself as the fastest-growing premium brand in the American market, lifting the overall image of the Hyundai brand.

Since entering the U.S. in 2016, Genesis has increased its sales by about 12 times in less than a decade. Sales were only 6,948 units in 2016, but reached 82,331 units last year. After overtaking Nissan's Infiniti in 2022, Genesis now maintains a 6th-place share in the U.S. luxury car market.

The U.S. premium car market has long been dominated by a "Big Three" of Mercedes-Benz, BMW, and Lexus, with Acura, Lincoln, Nissan, and others positioned below them. Genesis has carved out a niche by posting an average annual growth rate of 60% over the past 10 years. Some forecasts now suggest that the brand could overtake Lincoln this year and break into the top five.

Chung Euisun, Chairman of Hyundai Motor Group, announcing the launch of the Genesis brand at the Genesis brand launch ceremony in November 2015. Provided by Hyundai Motor Group

From launch to the present, Genesis has been a project personally overseen by Chairman Chung Euisun. He judged that Hyundai Motor's technological capabilities had reached a level where it could build an independent luxury brand, and he was convinced that launching a premium marque would serve as a catalyst to elevate Hyundai's overall brand image.

Today, with the exception of the GV70, most Genesis models are produced at domestic plants in Korea and exported to the United States. Last year, Genesis achieved record U.S. sales of 82,331 units, accounting for 9.1% of Hyundai Motor's total sales, including Genesis. Given the higher average transaction prices typical of luxury vehicles, its contribution is even greater when measured in export value.

Pony Excel being loaded at the Ulsan Port pier for export to the United States in January 1986. Provided by Hyundai Motor.