Published: May 3, 2013
John Krafcik, SM ’88, president and CEO of Hyundai, has been in love with cars from the time he was two years old.
The MIT Sloan alumnus spoke to students, faculty, and staff Monday, April 29, in Wong Auditorium about his career spent largely in the automotive industry. Krafcik was the third speaker in the Dean’s Innovative Leader Series for the spring 2013 semester.
Krafcik came to MIT Sloan to study the automotive industry inside and out. He visited 90 different automotive assembly plants in 20 different countries while a student. A paper he wrote entitled “The Triumph of the Lean Production System,” was published in MIT Sloan Management Review, and is still referenced by MIT Sloan professors today.
Krafcik worked briefly in consulting before joining Ford Motor Company where he worked for 14 years. After test driving a Hyundai, Krafcik admitted that the car was “terrible,” but he was intrigued by the small but growing car company. He joined Hyundai Motor America in 2004, and became CEO in 2008. At that time the company’s philosophy was “Diligence, Frugality, and Harmony.” Krafcik admits it was not “sexy.” The company’s mantra was then later changed to “Defy, Design, and Delight.” With design improvements to its line of cars, and a higher quality product, sales began in increase.
“In 2004, we really weren’t on the radar of our competitors,” Krafcik said. “We came up with this concept called Hyundai Assurance … which was a simple idea to build consumer confidence. If you were to lose your job you could return your car to Hyundai with no questions asked. And you wouldn’t have to worry about your credit. It really worked for us.”
Hyundai’s next innovative marketing idea was to offer America’s best warranty—a 10-year, 100,000 mile warranty. Sales continued to grow.
Krafcik noted the company has been transformed over the last 10 years because it has defied expectations. “Design is in our mantra now because we realized at a profound level the importance of design in everything we do,” Krafcik said. “People buy cars because they like how they look. They want the car in their driveway because of the way it looks.”
Lastly, Krafcik spoke of the delight aspect of the company’s motto. Owners of Hyundai’s premium brand cars the Equus and Genesis are offered a unique service package. Anytime one of these cars needs work, a service person will bring a loaner car to the owner, and take the owner’s car back to the dealership to be worked on so they don’t have to wait for it.
“Sales satisfaction is up 21 points,” Krafcik said. “Hyundai has the highest retail satisfaction brand among all of the Asian car companies,” he said.
Since Krafcik took over the helm of the automaker, Hyundai’s North American market share has grown by 50 percent.