Imagine a young boy from an impoverished family toiling in the fields for 17 hours each day, all for just one decent meal. Now, fast forward and envision that very same boy growing up to be the mastermind behind a billion-dollar car empire.
That’s exactly the tale of Hyundai’s founder, Chung Ju-Yung. His life was proof of the transformative power of vision, perseverance, and resilience. While experiencing both adversity and triumph, not only did he reshape his destiny, but he also played a pivotal role in the automotive industry and the economic landscape of South Korea.
Early Life and Background
Birth and Childhood in Asan
Chung Ju-yung entered the world in 1915 in the small, rustic village of Asan, located in what is now North Korea. Born to a large, impoverished family of farmers, he was the eldest of seven siblings. As a child, he dreamt of being a school teacher, but he quickly faced a harsh reality: his family was too poor for him to pursue much education. As a child, he labored in the fields with his family, but despite their hard work, they often struggled for basic necessities like food, clothes, and medical care.
Chung’s trips to a nearby city to sell wood opened his eyes. He noticed people there leading comfortable lives without toiling in fields all day. This disparity filled him with sadness and frustration, fueling his desire for a better life.
Attempts to Escape Poverty
A newspaper article about a construction site seeking laborers sparked something in him. At 16, he made a bold move. He and a friend trekked 160 km to Kowon city and started work as construction laborers. Though the pay was low, Chung cherished his newfound independence. Unfortunately, Chung’s independence was short-lived. Caught by his father, he returned to farming.
After his enlightening experience during his first escape, Chung Ju-Yung returned to his home village more determined than ever. His brief taste of independence and work ignited a passion for civil engineering and a burning desire for self-achievement. With this renewed aspiration, Chung began plotting another escape, this time setting his sights on Keijō, the city now known as Seoul.
In April 1933, Chung, along with two companions, embarked on their journey to Keijō. However, the journey was fraught with challenges from the outset. One of them was caught by a sibling. Then, they were conned by a stranger who took all their money. Chung’s father caught them staying at the boy’s grandfather’s house nearby, so he took Chung home.
Chung stayed home for a year, helping his father work at the farm. Eventually, he escaped again by selling one of his father’s cows for 70 won. With the money, he bought a train ticket, a simple yet significant purchase that marked the beginning of his next venture.
Upon arriving in Keijō, now known as Seoul, Chung took a proactive step towards building a career. He enrolled in a local bookkeeping school, aiming to become an accountant. This move represented a new direction in his life, a path that he hoped would lead to financial stability and success. For two months, things seemed to be going according to plan.
However, his father managed to locate him again. After what was likely a heartfelt and tense exchange, Chung’s father persuaded him to return to Gasan. This moment marked the end of yet another escape attempt, a testament to Chung’s unyielding spirit and his continuous struggle against the confines of his humble beginnings.
At 18, Chung made his fourth and final escape to Seoul. He took any job he could find, eventually landing a role as a delivery boy at the Bokheung rice store. Impressed by his diligence, the store owner quickly promoted him to manager.
Rise to Business Ownership
Chung’s hard work at the rice store didn’t go unnoticed. In 1937, when the store owner fell ill, he made a surprising decision: he handed the business over to Chung. At just 22, Chung transitioned from employee to owner. He worked tirelessly to build the store’s reputation and trust in the market.
But then World War II hit, and the Japanese occupation took its toll, seizing all rice shops in Korea, including Chung’s. All his hard work was for nothing, and it made Chung very upset. However, his spirit remained unbroken.
Overcoming Adversity During Japanese Occupation and World War II
After his business failed, he returned to his village in 1940, and then he decided once again to try Keijō. When he understood that the Japanese colonial government was restricting certain Korean industries, he started finding a business over which the Japanese had no control.
Starting the A-do Service Garage
In 1940, Chung started focusing on a car repair business. He took a loan of 3,000 won and started the A-do Service Garage. However, just a month after opening, disaster struck. A fire engulfed the garage, reducing everything to ashes. Faced with the daunting task of repaying his loan and compensating his customers, Chung found himself in a dire situation.
Where many might have given up, Chung demonstrated his resilience. Undeterred, he secured another loan of 3,500 won and set about building a new and improved garage. He recognized that one of the biggest customer pain points was the lengthy repair times. Determined to stand out, Chung focused on speed, completing repairs that took others 20 days in just 5. This commitment to efficiency quickly paid off. By 1943, his business was thriving, employing 80 workers, and he had settled his family comfortably in Seoul.
Just as his business was hitting its stride, another wave of adversity came with the Second World War. Japan, in need of war equipment, seized Chung’s garage and merged it with a local steel plant. Once again, Chung lost his business and was forced to return to his village. Yet, even in the face of this setback, he remained undaunted. He was ready to embark on another venture with 50,000 won saved up and a relentless spirit.
A New Era in Korea
The end of World War II brought significant changes to Korea. With Japan’s rule coming to an end, Korea was split into North and South, influenced by the Soviet Union and America, respectively. This division marked a new chapter in the nation’s history, and for Chung, it presented a new landscape of opportunities.
Reestablishing in Seoul with Hyundai Auto Service
In 1946, Chung Ju-Yung made his way back to Seoul and reignited his passion for the automotive industry by reopening his car repair business under a new name: ‘Hyundai Auto Service.’ ‘Hyundai,’ meaning ‘Modern,’ reflected his forward-thinking approach. The business was doing well, but Chung was always on the lookout for new opportunities.
Entering the Construction Business
Chung’s keen eye soon noticed the construction projects being undertaken by America for its military forces. Despite his limited experience in construction, his past labor work fueled his passion for this industry. At 31, in 1947, Chung boldly established the Hyundai Civil Works Company, venturing into the construction business. Starting with small projects, by the 1950s, his company had begun securing major construction contracts, marking a significant shift in his business focus.
Overcoming Challenges during the Korean War
However, Chung’s path was never smooth. In June 1950, when North Korea invaded South Korea, he found himself in a precarious situation as troops neared Seoul. Fleeing to Pusan with his savings, Chung faced yet another crisis but remained undeterred. He quickly identified a need: the US army, allied with South Korea, required infrastructure like tents, warehouses, and army headquarters. Chung seized this opportunity, understanding that the Americans valued reliability and timely delivery.
Building a Reputation for Reliability
With a ‘can do’ attitude and a small but dedicated team, Chung started taking on any viable construction project, offering competitive prices and reliable service. Despite the ongoing war, losses, and challenges, Chung never abandoned a project midway. This commitment to his word built a strong rapport with the American forces.
The war ended in 1952, but Chung’s relationship with the American forces continued to bring in contracts. As South Korea embarked on rebuilding the nation, the government rapidly initiated infrastructure projects like bridges, dams, and roads. Hyundai was at the forefront of this reconstruction, contributing significantly to national projects. The company was instrumental in building key infrastructures like the Soyoung Dam and the Kyungbu Expressway – both essential to South Korea’s development.
Founding of Hyundai
In 1947, Chung established Hyundai Engineering and Construction amidst the ruins of post-war Korea. This venture into construction was just the beginning.
Venturing into Car Manufacturing
By the 1960s, Chung Ju-yung, who was now in his early 50s, had built a thriving construction business. Yet, he yearned for more. Having constructed thousands of kilometers of roads, Chung’s next ambition was to create the vehicles that would travel on them. In 1967, he founded Hyundai Motors Company, and a year later, struck a deal with Ford to assemble Cortina cars. This partnership was fruitful for two years until disagreements emerged, primarily because Ford was opposed to Hyundai building its own cars.
Revolutionizing South Korea’s Automotive Industry
Chung Ju-yung’s vision for Hyundai was not limited to creating a successful business; it was about transforming South Korea’s place in the global automotive landscape. At a time when the nation’s automotive industry was virtually non-existent, Chung dreamed of putting South Korea on the map as a major car manufacturer. His ambition was to break the country’s dependence on imported vehicles and to foster technological independence and innovation in the automotive sector.
Paving the Way for Korean Cars
The journey of Hyundai Motor Company from its inception to becoming a key player in the global automotive industry was fraught with challenges. One of the most significant hurdles was the lack of technical expertise in South Korea to design and manufacture automobiles. This gap in knowledge and skills meant that Chung and his team had to start from scratch, learning and innovating every step of the way.
The development of the first Korean car was a milestone laden with trials and triumphs. Hyundai’s initial collaboration with established foreign automakers provided the necessary technical knowledge. However, the real breakthrough came with the introduction of the Hyundai Pony in 1975, South Korea’s first entirely homegrown car.
Global Expansion and Eventual Success
Challenges and Bold Decisions
Despite the domestic success of the Pony, Hyundai faced challenges internationally due to quality issues. After seven consecutive years of losses, many advised Chung to shut down the motor company. Defying expectations, Chung planned to build a new factory with an annual capacity of 300,000 cars – a bold move considering the small size of the South Korean market. But Chung foresaw the rapid growth of the South Korean economy and the potential rise in demand for cars, both domestically and internationally, and he was right.
Global Success and Entering the US Market
The new factory was completed in 1980, and by 1982, Hyundai launched the improved Pony 2, which was not only a hit in South Korea but also found success in Africa, Latin America, and Canada. Hyundai’s sales soared to 400,000 cars, turning the company profitable and establishing it as a respectable global car manufacturer. However, the largest and most competitive market, the USA, was yet to be conquered.
Hyundai’s strategy for entering the US market was carefully crafted. Recognizing Japan’s dominance in the compact car segment and the intense competition in the mid-to-large American car market, Hyundai targeted the sub-compact segment, where competition was minimal. Additionally, Hyundai positioned its new model, the Hyundai Excel, at the price point of a second-hand car in the USA, offering it with a five-year warranty. This strategy significantly disrupted the US car market, cementing Hyundai’s place as a major global car company.
The Hyundai Excel Revolution in the USA
The Hyundai Excel was a game-changer in the American market. Second-hand car buyers quickly gravitated towards this brand-new, affordable option. In 1986, Hyundai made waves by selling around 170,000 Excels in the USA. The following year, sales soared to approximately 260,000 cars. During this period, the Hyundai Excel emerged as the best-selling imported car in the USA, a feat unprecedented for any newcomer in the American automotive market. This success firmly established Hyundai as a major player in car sales.
Chung’s Retirement and the Company’s Continued Success
In the year that Hyundai reached this milestone, Chung Ju-yung, then 72, stepped back from the helm of Hyundai, transitioning to the role of honorary chairman. The responsibility of managing the company was passed on to his brothers and sons, who continued to lead with the same fervor and determination. Under their stewardship, Hyundai has grown exponentially and is now the third-largest car manufacturer in the world. In 2022 alone, they sold about 40 million cars.
Hyundai’s Diverse Portfolio and Impact on South Korea
Beyond its renowned car business, Hyundai’s reach extends across 42 different companies within the Hyundai Group. This includes diverse sectors like Hyundai Elevator, Hyundai Information Technology, and Hyundai Heavy Industries, the latter being the largest shipbuilding company globally. Hyundai’s influence has been so profound that it has propelled South Korea ahead of Japan in several industries.
Later Life and Death
In his later years, Chung Ju-Yung demonstrated the same vigor and commitment to innovation that had characterized his earlier life. Even as he stepped back from Hyundai’s day-to-day operations, Chung remained actively involved in overseeing the strategic direction of the conglomerate he had built from the ground up. His later years were also marked by his forays into philanthropy and brief political involvement, reflecting his ongoing commitment to the welfare and progress of South Korea.
Passing of a Legend
Chung Ju-yung’s remarkable journey came to an end on March 21, 2001, when he passed away at the age of 85. His death marked the conclusion of a chapter in South Korea’s industrial and economic history. Chung’s passing was mourned not just by his family and the Hyundai conglomerate but also by the entire nation, which recognized his immense contributions to South Korea’s global standing and economic development.
Legacy and Impact of Chung Ju-Yung
Economic Impact to South Korea
The legacy of Chung Ju-yung and his creation, Hyundai, is deeply intertwined with the economic development of South Korea. Under Chung’s leadership, Hyundai emerged as a business conglomerate and a catalyst for the nation’s economic transformation. Hyundai’s expansion into various sectors, including construction, automobiles, and shipbuilding, significantly contributed to South Korea’s growth, especially during the latter half of the 20th century.
Hyundai’s growth contributed significantly to South Korea’s GDP and employment, helping to elevate the country from a war-torn economy to a thriving, industrialized nation. The company’s global success also helped to enhance South Korea’s international reputation, showcasing its technological prowess and industrial capabilities to the world.
In short, Chung did not only make himself rich – he took his nation to rise with him.
Personal Philosophy of Self-Reliance and Education
Chung Ju-yung’s personal philosophy was a blend of self-reliance, hard work, and the value of education. He believed firmly in the power of self-made success, a belief that was reflected in his journey from a poverty-stricken childhood to becoming a leading industrialist. Chung’s emphasis on hard work was evident in his hands-on approach to business and his expectation that employees put in their utmost effort.
Education, though Chung himself had limited formal schooling, was a cornerstone of his philosophy. He understood its importance in personal and national development, advocating for and investing in educational initiatives. Chung’s commitment to education was also reflected in his emphasis on training and developing his employees, ensuring that they were skilled and knowledgeable.
Philanthropy and Political Involvement
Chung Ju-yung’s impact extended beyond the corporate realm into philanthropy and political involvement. His philanthropic efforts were wide-ranging, including significant contributions to educational institutions, social welfare projects, and cultural initiatives. He believed in giving back to society and utilized his resources to support various causes that aided in the development and well-being of the South Korean people.
Notably, in 1998, he visited North Korea with a gift of 1,001 cattle transported by a convoy of trucks. Remember, his former hometown is located in North Korea, where he stole one cattle from his father when he was young so he could escape, making it a fitting gift.
In the political arena, Chung’s influence was notable. While he was known for his business acumen, he was also a fierce nationalist. He played a major role in an outsider bid to host the 1998 Olympics. While his foray into politics, including a presidential bid, was brief and met with mixed reactions, it underscored his deep concern for the nation’s welfare and his desire to contribute to its governance and policy-making.
Final Words
For South Korea, Hyundai is more than just a company; it’s a national institution. It has played a crucial role in rebuilding the nation, creating thousands of jobs, and bringing international recognition to South Korea. All this began with a village boy who lacked basic amenities like food, education, and healthcare. What he did possess, however, was immense passion, a clear vision, and, above all, a relentless desire for a better life and future.