Hyundai Motor Co. and Kia Motors Corp. have appointed Kim Hae-jin as the new president of their joint research and development division. The appointment came a month after previous chief Kwon Moon-shik resigned to take responsibility for a series of quality issues. Kim was chief of the development of engines and transmission and was previously in charge of r&d quality control.
Quality issues, particularly potential glitches in brake switches, have caused Hyundai and Kia -- share parts and platforms – to recall almost 1.7 million vehicles in the United States in April 2013. The South Korean carmakers also recalled another 600,000 vehicles in their home turf in September due to the same issues.
The appointment "is aimed at solidifying our quality management," Hyundai Motor Group said in a statement. Market watchers say that Kim will need to speed up efforts to expand the companies' range of fuel-efficient diesel and hybrid engines to fend off imports in South Korea.
Hyundai is getting ready to commence sales of its hydrogen-fueled Tucson crossover in 2014 in the United States, where Japanese rival Nissan Motor Co. has been selling battery-powered electric cars. "Hyundai has been a market follower, and has brought their technology to the levels of overseas rivals. But this is not enough," Cho Chul, a researcher at the Korea Institute for Industrial Economics & Trade, told Reuters.
He remarked that Hyundai needs to become a trend-setter, on which r&d plays a crucial role. He added that Hyundai needs to boost its r&d budget. Hyundai spent KRW1.63 trillion ($1.54 billion) on r&d in 2012, equivalent to just 1.9 percent of revenue. In contrast, BMW AG spent EUR3.99 billion ($5.47 billion), or 5.2 percent of revenue. [source: Hyundai]