After the "bulldozer": Hyundai's consensus-building heir-apparent

Sun Nov 2, 2014 4:12pm EST
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By Hyunjoo Jin

SEOUL (Reuters) - When he attended design preview meetings for the Genesis luxury sedan, Hyundai Motor heir-apparent Chung Eui-sun suggested features he'd seen on high-end European rivals, such as a pop-up navigation screen and a gearshift that rises and retracts.

But the ideas faced opposition from engineering chief Yang Woong-chul, who was worried about the technology, and Chung did not insist, said a person who sat in the monthly meetings. The features did not make it into the car, launched late last year.

The story neatly illustrates the challenge facing the design-loving, consensus-building "E.S.", the only son of group chairman Chung Mong-koo, in driving change at the company when he eventually succeeds his famously autocratic father.

"M.K. orders this and that. But that is not the way E.S. does business," said the person present at the meetings. "E.S. wants to take Hyundai's design to the next level. But he has faced a lot of hurdles."

"M.K." Chung, who turned a once obscure Asian also-ran into the world's fifth-largest car maker, gives no sign, at 76, that he plans to step down soon. But investors are increasingly preparing for the transition to the third generation of leaders of the family-run conglomerates, or "chaebol", that dominate Asia's fourth-largest economy.

Having spent his career in his father's considerable shadow, E.S. Chung must still prove his mettle as a leader, some company watchers say, and will be challenged to modernize a corporate culture regarded as among the most hidebound in South Korea.

Despite a successful four-year stint as president of Kia Motors (000270.KS: Quote), during which the Hyundai affiliate grew faster than its parent and won kudos for making attractive cars, E.S. Chung, who as the 44-year-old vice chairman of Hyundai Motor (005380.KS: Quote) is the third-youngest of its 258 top executives, is a relative unknown.

Like his contemporary Jay Y. Lee, who is in line to take the reins at rival Korean export powerhouse Samsung Electronics (005930.KS: Quote), E.S. Chung will also be challenged to turn his company from fast-follower to trendsetter as it tries to sell better and more expensive products to differentiate from an expected wave of cheaper Chinese models.   Continued...

Chung Eui-sun, vice chairman of Hyundai Motor Company, addresses the audience during a ceremony at Hyundai Assan car plant in Izmit, western Turkey, in this September 26, 2013 file photograph.  REUTERS/Murad Sezer/Files