What Kia & Hyundai Can Teach The Others About Car Making

Let's make a run down on the economy shall we? Well since this is not “LIVE LIE DIE” magazine by “Financial Weekly”, I'll just cut to the chase by saying that the world spent too much from year 2000 to 2008. As a result, many bankrupted and everyone is in deep shit now all over the world. A tenth of America is unemployed. Greece is essentially now a country choked with fat, useless, lazy butts who would rather go on strike than working extra hours to fix their economy. The once steaming ahead Germans are pulled back by French workers demanding more holidays and Italians who prefer an entertaining, scandal-clad premier to one who actually works (Ok, Berlusconi resigned just only). While the lazy Westerners are all busy striking, complaining and crying, the hardworking Japanese are still suffering from the aftermath of the devastating Tsunami in March. To add salt to the already wounded Japanese economy, their close counterpart, Thailand was hit by an unprecedented flood. The series of unfortunate events and added American pressure caused the Japanese Yen to shoot up to an unprecedented high, which is not terribly helping the case here where their exports became expensive.

The entire despair filled fiasco seems to take out the remaining teensy bit of enthusiasm and whatever faith there is left in most industries. This is even evident in the manufacturing sectors of those advanced, developed economies. The Lexus LFA was delayed and delayed and then finally launched in limited numbers. The Honda NSX was cancelled and resumed and cancelled and resumed till we're not sure whether it's cancelled or resumed. The Type-R was declared dead and then alive, while Mitsubishi said they're shutting down the Ralliart division. GM sold Hummer and then sabotaged Sweden's second love, and Ford sold off Sweden's first love to the Chinese with a paltry, pathetic $2 billion. If you think that was bad, here comes the worst of the bunch. Sergio Marchionne of Fiat, said it’s not worth spending too much resources on a new Fiat or Alfa Romeo for that matter. To antagonize the automotive world even more, Fiat again and again delayed the return of Alfa Romeo to the United States despite proclaiming in 2004 that the comeback would happen in year 2005, and then 2007, 2010, 2013 and now 2015 or beyond.

You know what's wrong? Confidence, or better yet, the lack of it.

The entire economy, its physical infrastructures, raw materials and labour, are often bind together and represented as a perceived value. Much to the contrary, this perceived value is also the amalgamation of confidence as well. You think you'll earn more, leading to overspending without second thoughts thinking that finances will take care of itself eventually. More people think along the same line and you'll have ready customers lining up the moment you begin selling whatever new products your company produces, and so forth - a higher paycheck for you - to spend on other people's new products.

On the manufacturing side of things, it's the same case. You believe people love your products, therefore you allocate additional resources for new developments. You produce better products, people love it and then they buy them. Vice versa, since Sergio is an accountant, he'll look at the numbers and simply say "We're not going to spend money making awesome new Alfa Romeos because no one's buying current Alfa Romeos." On the other hand, he looked at Luca Di Montezemolo's balance sheets, and decided that Ferrari should make more models because they're doing well. Thus the result of more than five new Ferrari models in the past three years whereas Fiat gets only two and Alfa Romeo a paltry one.

This is wrong! While accountants are proficient at fixing the world's corporate nightmares, they're not exactly adept at ambitious, game changing dreams. They simply “poke” calculators and scream “defend”! They start to advice companies to fire workers, shut down factories and sell off assets just to stay in the “black”. If all the car makers in the world were run by accountants, we'll be all be driving Tata's 1 lakh car instead of Porsche 911s. Sergio lacked confidence, in essence, he's only out on a “save and rescue” mission. Unfortunately, too many a time the advice of “the greatest defense is offense” has slipped off his mind. Lancia was a great brand. A brand which Top Gear claims to be the greatest car manufacturer of all time. Lancia made the first wind tunnel designed car. The first to turbocharge and supercharge a car and the only car maker to defeat the 4WD might of the Audi Quattro in a rally with the rear wheel drive T037. On top of that, they were the first car maker to introduce sports saloons with automatic spoiler integrated into the boot lid. Despite all these, what did Sergio see in Lancia? Nothing more than a brand with no significant output for the Fiat group. So what did he do? He took Chryslers, removed their badges, replaced with Lancia's and sold these cars in Europe as Lancias. He took the extraordinary Lancia Delta, the one that won the World Rally Championships 6 times on the trot, and gave it a bastard lovechild 'successor' of a platform sharing Fiat Bravo - while destroying the brand itself in the process. He dared not even produce right hand drive Lancias for the British market, in fear of the rusted fame it once had, even after Top Gear glorified the brand's exemplary past on the show with 400 million audience all over the world.

While the car making juggernauts are all floundering left right center, peeling off sheets and sheets of red balance sheets stuffing in their mouth and shitting out believing this solves the problem, Kia, the brand which we all joked around saying we'd rather have a Proton five years ago, hired Peter Schreyer.This is the guy who designed the original Audi TT and launched the Kia Forte. I mean, just look at it. The styling, the interior build quality, the excellent engine, the six-speed gearbox, the leather, the push-start button, the bluetooth hands-free and iPhone connectors, the entire image where the car proudly stands tall with the Kia badge alongside. The only interpretation that comes to mind is that the Koreans are relishing their dreams of producing world beating cars and their least concern is that the world saw them as inferior car maker a few years back. They don't actually care if anyone is going to buy a Kia that demands Toyota or Honda money. What they have on the back of their minds is to produce a world-beating car and make money with it in the process, and then move on to designing and making better and better cars. They dream, keep themselves intact, force their way ahead, hire the best in the business, the bosses shuts themselves up while listening and believing in their newly appointed head honchos during meetings.

What are the results? Well, we see them today don't we? Hyundai and Kia, both sister companies combined, is now the fourth largest car manufacturer in the world. Their products and lineups? Just look at them. Specification levels? Build quality? Reliability? Fuel efficiency? Top of the cream. Are people buying them? Will people buy crap cars just because they're cheap? No. The market, the economy and the world is hedged on perceived values, on confidence, on dreams. You have to believe, imagine and dream about customers storming into your showrooms to buy your magnificent products, then only you'll sit down and start pursuing what makes a product awesome. You don't make future craps because no one's buying your current crap. That, is the basics for employee motivation classes and I think Sergio Marchionne should attend one organized by Kia or Hyundai, in order to feel that kind of emotion, that kind of momentum going around, that kind of confidence, that kind of suave passion for success and above all, to instill more of that little bit of Kia Forte in him.