Kia Motors is a global household name and has experienced unprecedented success recently in Europe. Despite being a major player on the international stage, the company remains uniquely ‘Korean’. The International Interest asked Tae-Hyun Oh, Executive Vice President & Chief Operating Officer of Kia Motors Corp, about Kia’s identity in the midst of a globalised world, the impact of Korean values on business overseas, and the secret behind the recent success in Europe.
1) KIA has succeeded in competing in an increasingly globalised world without compromising its Korean identity. How has it done this? In what aspects does KIA represent the values within Korean culture?
Based on my experience over the last 33 years at both Hyundai and Kia, I believe the main strength of Korean companies is our hard working employees and a corporate culture that emphasizes dedication and personal sacrifice for the brand.
After the Korean War in the early 1950s, the entire Korean peninsula was completely devastated and in ruins, with very little or no infrastructure and natural resources. People from my parents’ generation found themselves in dire straits, and the human spirit of survival and Koreans’ inherent work ethic were the only resources available to rebuild the country. So education naturally became the most important driver of the country’s development. In fact, those who say that many Koreans spend much of their earnings on their children’s education are not exaggerating, and this was the case with me as well.
Moreover, I believe the unprecedented rise of the post-war Korean economy, including Kia’s long track-record as the true pioneer of the Korean personal mobility industry, was mainly due to the willingness to work hard and long hours with scant resources to achieve “miracles” that drove success. Today, I believe our company continues this value/mindset of treating resources as very precious while setting very ambitious targets to drive innovation and growth.
So, in my view, Kia Motors has been able to thrive even in the West based on such a strong emphasis on education and hard work. As a business leader, I believe that investing in people is the most important way a company can ensure both short-term and long-term success.
Also, there is a very strong ‘family’ or ‘group’ oriented culture here in Korea that has its roots in Confucianism, and our employees consider their colleagues as their family members who are striving for the same goals while sharing the same motivation to make our company better every day.
2) How does KIA incorporate Korean culture and values in business? And does this spread across global operations?
In addition to the aforementioned, another facet of Korean life that stands out to many outsiders is the ‘ppali ppali’ (meaning ‘hurry, hurry’) culture in which Korean individuals and businesses conduct their work with a great sense of urgency and efficiency. Decision making at a company like Kia may be perceived as a bit slow compared to companies in the West due to a very hierarchal structure and meticulous planning processes, but once an executive decision has been made execution is carried out at breakneck speed with clear targets in place. I believe this focus on speed has played a key role in Kia’s dramatic recent growth that has seen our global sales volume more than double between 2008 and 2013.
And this trait certainly has permeated our operations in every part of the world. Our recent successful entry into the Mexican market is a perfect case in point. While it took about one and a half years to make the final decision to establish a manufacturing plant and launch the Kia brand in Mexico, we are on track to complete construction of the state-of-the-art production facility, which will feature annual capacity of 300,000 units annually, in just one calendar year since breaking ground. Moreover, we launched the first 21 full-service Kia dealerships in Mexico just seven months after setting up our sales subsidiary for the Mexican market, and these dealers were able to immediately enjoy the fruits of our initial success in the local market. So our overseas partners and employees have certainly bought in to the Korean way of doing business.
Meanwhile, we operate an annual global employee exchange program in which Kia overseas staff work at headquarters in Korea for a two-month period and are exposed to Korean culture and business practices. Furthermore, all of our expatriate Korean staff receive intensive training prior to being sent to overseas postings so that they can quickly adapt to foreign cultures and local business practices with an open mind. Through activities such as these we are creating positive synergies in terms of cultural convergence among all Kia team members worldwide.
3) KIA is achieving unprecedented success in Europe. What is behind this drive?
Kia has undergone a dramatic design revolution in the last several years, which has completely transformed our model line-up – Kia’s products are now among the best-looking cars on the road.
In addition to design, new models launched across high-volume A-, B-, C- and D-segments, as well as in the C-MPV and D-SUV segments, mean that Kia now offers products in 75% of all vehicle segments in Europe.
With each new or updated car, Kia has sought to introduce improvements to quality and performance, as well as adopting high-tech features that customers expect from modern cars. All of our products sold in Europe are also backed by an industry-leading 7-year, 150,000-km warranty.
As well as upgrading and renewing our product line-up, Kia Motors Europe has shifted its focus to what we call qualitative growth. The brand continues to enjoy sales expansion across Europe, but now we’re transforming the purchase and ownership experience for our customers, and improving the way that motorists perceive the Kia brand. We are making consistent improvements to our dealer network and the customer experience as part of a plan to make Kia the car brand that motorists enjoy dealing with the most.
Meanwhile, our state-of-the-art manufacturing plant in Slovakia has been a driving force behind Kia’s recent success in Europe since production began in 2006. Earlier this year, the 2 millionth Kia vehicle rolled of the assembly line and the plant now produces a range of high quality, European-designed, European-engineered cars that buyers across the continent want to own.
4) As a car manufacturer, the question regarding the Volkswagen emission scandal cannot be avoided. Do you believe this to be an exception or potentially a more wider problem within the industry?
Kia cannot comment on an issue affecting another company, and there is no evidence that this is an industry-wide issue, an assertion that has been voiced by the ACEA (European Automobile Manufacturers’ Association). Kia Motors continues to work hard to reduce our environmental impact on a global scale by developing and bringing to market a range of clean combustion and alternative powertrain technologies.