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Structural FEA in the Automotive Industry - Digital Engineering 24/7 (digitalengineering247.com)

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 Paper Presentation on

HYUNDAI

Submitted to

Global Business Management -MS

Executive Master of Business Administration

Submitted by

B. Karthikeyan – Ms23w017
Lalith- Ms23w018

Indian Institute of Technology Madras

Chennai – 600 113.

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 Table of Contents
Abstract

1.Introduction about the Automotive Industry

2. Structural Analysis of the Automotive Industry
3. Value Chain Analysis
4. About Hyundai and Competitor Analysis

5. Global strategies adopted by the company

6. Growth Drivers
7. Performance Benchmarking
8. Challenges and opportunities Faced

9. Future Industry and Business Analysis

10. Recommended Glide pathe for the Company

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Abstract

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 1 - Introduction about Automotive Industry

Automotive Industry comprises a wide range of companies and Organizations involved in the
Design, Development, Manufacturing, Marketing, Selling, Repairing and Modification of
Motor vehicles. It is on of the largest industries by revenue (from 16% to 40%).

The automotive industry begun in the 1860s with hundreds of pioneering the horseless
carriage. Early car manufacturing involved the manual assembly by human worker. The
process involved from engineers working on a stationary car, to a conveyor belt system where
the car passed through multiple stations more specialized engineers. Starting in then1960s,
robotic equipment was introduced to the process, and today most cars are produced largely
with automated machinery.

For Many decades, the United States led the world in total automobile production, with U.S,
Big Three General Motors Ford Motor Company and Chrysler being the World’s largest auto
manufacturers for a time, And GM and Ford remaining the two largest until mid-2000. In
1929, before the great Depression, 90% automobiles were produced by the U.S. In 1980, the
U.S was overtaken by Japan and the became a world leader again in 1994. Japan narrowly
passed the U.S. in production the years 2006 and 2007, and also in China, which in 2009 took
the top spot with 13.8 million units. China reached its top record of more than 29million
produced vehicles, which was so far largest margin from that of the U.S.

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2 - Structural Analysis of Automotive Industry
Structural analysis in the automotive industry encompasses various aspects. It includes
Vehicle cross simulation, Market structure and Innovation, Vehicle structural analysis
Challenges and Trends. Structural analysis using FEA allows engineers to evaluate the
strength, stiffness, and durability of vehicle components and assemblies. It involves
simulating the response of various structures, such as chassis, body frames, suspension
systems, and safety features, to different loading conditions.

2.1 – Vehicle Crash Simulation.

One of the most critical simulations in automotive design vehicle crash analysis. The
requirement for a crash simulation is regulated through specific accident scenarios and safety
targets. The objective of vehicle crash design is to allow energy absorption to take place
throughout the vehicle. Instead of designing a civilian armoured vehicle, where all is swept
before it, the vehicle is designed to progressively crumple at even modest impact levels.

Every component in the chain of events is designed to crumple, crush or in some way absorb
energy. Modeling requires sufficient mesh fidelity and accurate material strain rate behaviour
to provide realistic responses, as components evolve in the overall design.

Finite element analysis (FEA) of vehicle crash uses explicit analysis (described in “Impact,
Drop and Crash Testing and Analysis,” Desktop Engineering, August 2013). The size and
complexity of crash models have now reached the stage where sophisticated pre- and post-
processing is required. For example, an engineer must identify and visualize response of the
hundreds of components in the vehicle assembly during impact—using transparency, section
cutting, dissection, etc. Physical test result videos are overlaid on simulation animation for
correlation. Graphical plots of force, displacement or acceleration against time are spawned
interactively from key points to compare against test data

Crash test dummy simulation is now a mature area within vehicle crash analysis. Specific
models include gender, age and percentile range of height, weight, etc., and provide
standardization and repeatability. Dummy-based prediction is a simplification of real-world
response of occupants in a crash, of course, and there is research to move beyond this. But it’s
a difficult and challenging area from many perspectives.

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2.2 – Market Structure and Innovation
The automotive industry is well-suited to investigate the interaction between innovation and market
structure in a strategic context. Demand estimates—see for example Berry et al. [1995] and Goldberg
[1995]—reveal that markups over marginal costs tend to be large, consistent with the view that fixed
costs are important in this industry. Innovation is an important source of product differentiation as
firms’ competitive positions are improved through higher product quality, greater reliability and the
introduction of new product features. In addition, the industry is the poster child for the importance
of process innovations that continually boost productivity (Van 4 Biesebroeck [2003]). Developing
and producing automobiles is a highly research intensive activity: in 2006, more than 13% of all R&D
in the OECD was spent in ISIC industry 34 ‘Motor Vehicles’, more than in any other industry. Statistics
in Table 1 highlight the importance of automotive R&D in the five most research intensive
economies. Except for the U.S. where it is fourth, the industry is first or second in terms of R&D
spending in all countries. The top 13 firms in the auto industry spent more than 55 billion dollars on
R&D in 2005. The industry is also a heavyweight on the output side of the innovation process. In the
last 25 years, those same 13 firms were awarded more than 50,000 patents by the U.S. patent
office.2 The industry is concentrated worldwide, making it likely that firms will take actions of
competitors into account when deciding on their own innovative activities. In 2004, more than 95%
of all vehicles were sold by the 13 largest firms, which were active in all major regions of the world.3
The global automobile industry has seen significant consolidation over the last few decades. Many of
the industry giants have found it beneficial to join hands with some of their former rivals. The
mergers between Daimler-Benz and Chrysler and between Hyundai and Kia, the association between
Renault and Nissan and the takeover of Mazda, Jaguar and Volvo by Ford are but a few examples of
this consolidation.4 On the one hand, this consolidation is the result of increased competition and
high research intensity, which has made it harder for smaller firms to survive on their own. On the
other hand, consolidation has an impact on the intensity of competition as well. With fewer firms
around, standard economic models would predict less competition. However, the emerging groups
are more evenly matched in terms of research intensity and they are more likely to compete head-on
over their entire product range.

At the aggregate level, the equilibrium relationship between market structure and aggregate
innovation suggests that more competition is associated with less innovation. The raw data, in the
top-left panel of Figure 1, shows a negative relationship between the number of active firms and the
total number of patents granted in the industry. Patenting was a lot more intense in the last years of
the sample period, with 13 active firms, than in the earlier years, with 23 active firms. The negative
relationship is only slightly less pronounced if patents divided by revenue is used a measure of
innovation, as shown in the bottom-left panel.5 It is well known however, that the rate of patenting
has increased over time in all industries, especially after 1984 (Hall [2004]). If we purge the
innovation variable on the vertical axis from a flexible time trend with a cubic series and plot the
residual instead, the pattern is not as clear-cut. Patenting now appears to be stronger in early years
and the relationship between the number of firms and the total number of patents becomes U-
shaped. Using patents by revenue as innovation measure, the relationship remains downward-
sloping—less innovation when more firms are active— but now at a decreasing rate

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3.3 – Vehicle Structural Analysis

The vehicle body, often referred to as the “skeleton,” is a highly complex multi-material
structure. As the automotive industry focuses on lightweighting, the vehicle body becomes
even more intricate. It must operate robustly for decades. Structural engineers optimize the
body structure for durability, stiffness, and weight reduction. Modern vehicles use a mix of
materials (steel, aluminium, composites) to achieve these goals.

Vehicles endure years of use, so their structures must remain robust. Durability testing
involves cyclic loading, corrosion resistance, and exposure to extreme conditions. Fatigue
analysis ensures components won’t fail prematurely.

3.4 – Challenges and Trends

The automotive industry faces challenges related to complexity, cost pressure,

and regulatory requirements. Platform sharing, modular systems, and aggressive project
timescales are common trends. Innovations and adaptations will continue to shape the
industry beyond 2020, with a focus on sustainability and efficiency. Overall, the global
automotive industry is in better shape than it was five years ago, especially in the US, where
profits and sales have recovered following the recent economic crisis, and in China, where
growth remains strong. This progress will likely continue. By 2020, global profits for
automotive OEMs are expected to rise by almost 50 percent. The new profits will come
mainly from growth in emerging markets and, to a lesser extent, the US. Europe, Japan, and
South Korea will be stagnant in terms of profit growth.

There are four key challenges that OEMs need to address to get a piece of future profitability.
The analysis of this report projects to 2020, but these challenges will shape the industry until
at least 2025.

Complexity and cost pressure. There will be more platform sharing and more modular
systems. At the same time, regulatory pressures will tighten, and prices in established markets
are likely to be flat.

Diverging markets. OEMs need to adapt to changing regional and segment patterns of
supply and demand with respect to their production and supply base foot- prints, supply
chains, and product portfolios; and the emerging Chinese aftersales market offers new growth
opportunities.

Digital demands. Consumers want more connectivity, are focused on active safety and ease
of use, and are increasingly using digital sources in making their purchase decisions.

Shifting industry landscape. Suppliers will add more value in alternative powertrain
technologies and in innovative solutions for active safety and infotainment; Europe needs to
restructure and adjust its capacity to better match demand; and competition is emerging from
China.

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To capture future growth and find profit from these challenges – and to mitigate their risks –
OEMs cannot simply turn to their traditional toolbox. They need to review and adjust their
strategic priorities, deploy the appropriate investments and resources, and develop new skills
to execute these strategic objectives.

3 - Value chain Analysis

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The value chain is the activities that take from any product's conception until it is delivered to
the final destination, the customer. It is basically the creation of a product throughout all its
phases. It encompasses all the steps involved in the production and it is primarily to increase
the efficiency of a company by delivering maximum value for the lowest cost possible,
without compromising the quality of the product. When it comes to the automotive industry
value chain, it works just like that. Taking all the raw materials use for production and find
ways to get to the end product and eventually to the customers through the lowest possible
cost. It is important for companies to analyse their value chain and find competitive
opportunities.

3.1 - Primary Activities in Automotive Industry Value

Chain Analysis

The primary activities of the automotive industry chain are many and can differ from other
companies but they encompass:

Inbound Logistics:

Consisting in receiving raw materials from suppliers and distribute them through their
production line to start production. Here is essential to have a good partnership with the
supplier to get the lowest cost materials.

Operations:

This step involves taking those raw materials previously delivered and transform them into
the product the company is designing. Many manufacturers have their operations in different
points of the globe for cheaper shipping into several regions and faster delivery.

Outbound Logistics:

The outbound logistics in the automotive industry value chain consists in collecting,
handling, storing and distributing the product to its destination. This process is valuable for
the overall management of the company. It must focus in lowering costs and time of
production and at the same time remain reliable to the customers and the company’s values.
As this can be a great way of adding value, it is important that structured transportation and
delivery are at the highest standards to conform with the customers’ demands.

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Marketing and Sales:

Marketing and sales are a vital part of the value chain as it is when the product get the
customers’ attention. That can happen through advertising or promotion, management of the
relationship with customers and also distribution and management of sales. The goal here is
to target the right consumer as well as make them aware of the product and drive profits up.

Service:

In the last activity in the automotive industry value chain, the company offers customer
support after selling the product and a continuous platform for the maintenance of the
product. This activity also provides customer retention and improves brand image. A
carefully managed customer service is the face of a company toward the public and its
consumers.

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3.2- Support Activities in Automotive Industry Value
Chain Analysis

Support Activities in Automotive Industry Value Chain consists of activities that allow the
primary occupations to be performed.

Infrastructure:

It is the management of the company's culture and organizational structure. It is important to

know who is responsible for each department and to ensure the financial side of the company
is well taken care of to create higher profits.

Human Resource Management:

It is a valuable section of the company as enthusiastic and well-managed people are vital for
the success of the brand. This part encompasses things such as control of performance,
recruitment and training of human capital.

Technology Development:

Nowadays, technology is everything in the automotive industry including the first and the last
step of the automotive industry value chain. Technology development aims to reach vehicle
design, the safety of passengers and control over emissions that is a growing concern in the
industry and in the world.

Procurement:

The management of procurement aims to reduce costs of raw materials from suppliers and it
is important to keep costs low throughout the process of the value chain of the company. It
also improves reliability for the customer, as they already know what quality to expect when
buying a product from the company, as well as efficiency of the product.

In the automotive industry value chain are, among others, that innovation is at the core of
everything, and it is something that should be focused on if the goal is to surpass other
competitors and improve the quality of the products. Partner up with suppliers to achieve the
best raw material at the lowest cost and still maintain the highest quality of the end product
that the consumer is used to. Word of mouth from satisfied customers might be the best
marketing model to follow but knowing what the clients are looking for and promote it
accordingly, as well as maintaining great customer service even after selling the product
makes the customers come back. The diversification of the product line across different
markets and the logistics of parts makes a huge impact when it comes to saving costs and
getting the product faster into a region or market.

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4

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4 - About Hyundai & its Evolution

In 1947, the Hyundai Engineering and Construction Company was founded. The name
‘Hyundai’ means ‘modern times’, deriving from the Korean word ‘Hyun’ which means
‘modern’ or ‘present’ and ‘Dai’ which refers to ‘era’ or ‘generation’. Following the liberation
of South Korea in 1945, the company was awarded major government construction contracts
and became responsible for building much of the country’s transportation infrastructure as the
nation rapidly industrialised. It built the Kyeong-bu expressway, among other important
structures.

4.1 1960s-1970s: the era of mass production

In 1967, Hyundai Motor Company was founded. The following year, the construction of the
company’s Ulsan assembly plant was completed. Today, it is the world’s largest integrated
automobile manufacturing facility, with an annual production capacity of 1.6 million units.
With a global vessel fleet operated by Hyundai Gloves and its own steel-making affiliate,
Hyundai Motor Group controls the whole value chain. In 1968, the Cortina was the very first
vehicle successfully assembled by Hyundai at its Ulsan plant, in cooperation with Ford Motor
Company. Hyundai set a record for the quickest time between ground-breaking and full-scale
operations for any Ford assembly plant around the world – just under six months.

Following the Cortina’s initial success and eventual dominance of the European market,
Hyundai decided to develop its own car. The company hired George Turnbull, the former
Managing Director of Austin Morris at British Leyland in February 1974. He immediately
hired six European chief engineers to assist him, including a body designer, two chassis
designers, two production engineers and a test engineer. Together they created the Pony,
which was presented at the Turin Motor Show in October 1974, before it was later introduced
to the market in December 1975. The car was nicknamed ‘kukmincha’, which means ‘car for
the people’. Featuring styling by Giorgetti Giugiaro, this compact rear-wheel drive
automobile was the first mass-produced South Korean car. It became Hyundai’s flagship
vehicle for many years.

Hyundai started exporting the Pony to Chile, Argentina, Colombia and Egypt in 1976.
European exports to Belgium and the Netherlands began in 1978, with Greece added shortly
afterwards.

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4.2 1980s: International expansion

The 1980s was a time of rapid international expansion for Hyundai as the company became a
fast follower while competing with more established automakers. In 1982, the company
entered the British market for the first time. Sales of the Pony began in the United Kingdom
in February of that year, making it the first Korean car to be sold there.

In 1984, Hyundai began exporting the Pony to Canada, where sales greatly exceeded
expectations. At one point, it was the top-selling car on the Canadian market. The following
year, the first-generation Hyundai Sonata was introduced, and the company’s one-millionth
car was built.

By 1986, the Pony Excel became the first Hyundai model sold in the United States. It was the
first front-wheel drive car produced by the company and, like the original Pony, designed by
Giorgetto Giugiaro. It sold 168,000 units in its first year of sales in the US, setting an all-time
record that still stands to this day. Fortune magazine nominated the car as ‘Best Product #10’,
thanks in part to its affordability.

4.3 - 1990s: Quality management

In the spring of 1990, aggregate production of Hyundai automobiles reached the four million
marks. Then, in 1991, the company reached another milestone, as it developed its first
proprietary gasoline engine, the four-cylinder Alpha, as well as its own transmission. This
paved the way for technological independence. The Alpha engine debuted in the 1992
Hyundai Scope. During this decade, Hyundai continued to evolve and consolidate its position
as a leading international manufacturer of cars. Hyundai introduced many popular models in
this time period, including the Accent, Dynasty and Tiburon.

In 1994, the company began operating a newly-established R&D centre in Germany. This is
responsible for monitoring technology developments in Europe, as well as designing and
engineering new cars for the European market. In September 1997, Hyundai opened its first
manufacturing plant on the continent in Izmit, Turkey. It is Hyundai’s longest-running
overseas production facility. The 1990s saw Hyundai experiment with a number of electric
and hybrid vehicles. The company’s first pure electric car was the Sonata Electric Vehicle
prototype in 1991. After conducting its first experiments with hybrid propulsion systems in
1994, the hybrid-electric FGV-1 was unveiled at the 1995 Seoul Motor Show. This car
featured full-time electric drive technology. Flexible-fuel vehicles were being developed in

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1998, while the company’s fuel cell electric vehicle activities were also started in the late
1990s.In 1999, Chairman Mong-Koo Chung was inaugurated as the Hyundai Motor Group
Chairman, and decided to put an emphasis on product quality which paved the way for the
company to position itself as a serious global contender.

1.4 - 2000s: Bringing higher value products

By the turn of the millennium, Hyundai had begun to overhaul its image in order to establish
itself as a world-class brand. Its parent company, Hyundai Motor Group invested heavily in
the quality, design, manufacturing and long-term research of its vehicles, particularly in
Europe. The Hyundai European Design Center was established in 2001, and this was
followed in 2003 with the Hyundai Motor Europe Technical Centre and the Namyang Design
Centre.

Hyundai launched its first SUV, the Santa Fe, in 2000. Named after the city in New Mexico,
it proved a hit with American buyers and quickly became the company’s best-selling car.
This was followed in 2004 with the launch of another SUV, the Tucson. In 2007, the i30 was
introduced. Designed, developed and manufactured in Europe, it is Hyundai Motor’s DNA
car on the continent. The following year, Hyundai Motor Manufacturing Czech (HMMC) was
established. HMMC is Europe’s most modern production plant, with 500 high-tech robots
producing 1,500 Hyundai cars each day.

The hybrid electric Sonata, which featured lithium polymer battery technology, made its
debut at the 2008 Los Angeles International Auto Show, before going on sale in the US in
2011.

1.5 - 2010s and beyond: pioneers in future mobility

Throughout the 2010s, Hyundai has increasingly turned its attention towards environmentally
friendly vehicles and technology. Going forward, the company aims to lead the pollution-free
mobility era by improving fuel efficiency and seeking new energy possibilities. At the
beginning of the decade, Hyundai launched Blue On, its first production electric car, in Seoul
in September 2010. Sold in South Korea, Blue On was based on the Hyundai i10 and was
equipped with a 16.4 kWh lithium polymer battery pack with a six-hour charging time.

In 2013 Hyundai celebrated a key milestone in eco-mobility, as the ix35 Fuel Cell became the
first commercially mass-produced hydrogen fuel cell vehicle in the world. The vehicle’s

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quick refuelling time and long driving range, combined with its environmental conservation,
provide greater benefits for all.

The same year, the company also expanded into motor racing, with the launch of the
Hyundai Motorsport World Rally Championship team. In 2015, Hyundai announced the
high-performance Hyundai N sub-brand, which has resulted in the subsequent
development of award-winning production cars including the i30 N and i30 Fastback N
in 2017 and 2018.

In 2016, Hyundai introduced the IONIQ, the world’s first car to offer three electrified
powertrains – hybrid, plug-in hybrid and full electric. Its name derives from the word’s ‘ion’
and ‘unique’. This was followed in 2018 by the launch of the Kona Electric, Europe’s first
all-electric subcompact SUV, and NEXO, Hyundai’s second-generation fuel cell vehicle.

So far, the 2010s have seen Hyundai establish itself as a leader in the automotive industry
when it comes to future mobility. This can be seen in the company’s new ‘Progress’
communication campaign, which demonstrates how Hyundai’s 50-year heritage formed the
progressive spirit that allows it to continue to innovate today and meet the challenges of the
future, under the tagline “Next Awaits”.

In January 2019, Hyundai Motor Group’s Executive Vice Chairman Eui sun Chung was
appointed co-chair of the Hydrogen Council, a CEO-led partnership of companies from
various industry and energy sectors focused on accelerating the development and deployment
of hydrogen technologies around the globe. He has since called for increased international
cooperation to help tackle global climate challenges. Looking towards the future, Hyundai
Motor Group seeks to leverage its fuel cell technologies through ‘FCEV Vision 2030’. This
includes a plan to drastically boost its annual fuel cell systems production capacity to 700,000
units by 2030 and explore new business opportunities to supply them to other transportation,
power generation and storage system sectors.

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