S. Korean Auto Maker Hiring in Garden Grove

In preparation for its initial foray into the American automobile market, Hyundai Motor Corp., Korea’s largest car maker, plans to hire at least 200 people to staff its U.S. corporate headquarters in Garden Grove.

Max Jamiesson, vice president and chief operating officer of Hyundai Motor America, said only 25 people have been hired so far for jobs in marketing, sales and auto part distribution and service.

Housed in a 170,000-square-foot industrial building, the company expects to introduce an as-yet unidentified subcompact car, priced between $5,000 and $7,000, late this year.

Hyundai’s projections call for it to sell 100,000 of the front-wheel-drive cars during its first year in the United States through a network of 300 dealers. In 1984, the company sold more than 25,000 cars in Canada--a strong first-year showing, according to auto industry analysts.

Jamiesson hopes to repeat that success in the United States by filling a gap in the market for low-cost subcompact cars as the auto industry once again has turned its attention to the higher end of the market. Hyundai’s car could also prove to be an alternative to buying a used car in the $5,000-range, said Jamiesson, a former vice president for Toyota’s U.S. operations.

If the company does manage to sell 100,000 cars, it would become the seventh-largest exporter of cars to the United States, based on 1984 sales figures. Analysts, however, say the first-year sales target may be too optimistic: “I think it’s high,” said Joseph Phillippi, vice president of research at E.F. Hutton Group Inc. in New York City. “It’s a very aggressive target.”

Phillippi also said the company should not use its success in Canada as a basis for predicting strong demand from American car buyers. “The Canadian market is much more price-conscious” than the U.S. market, he said.

But Phillippi and other analysts still believe the Korean auto maker has a good chance to do well in its first year.

Others May Follow

Hyundai, as the first Korean car maker in the U.S. market, could be followed by other South Korean auto manufacturers into the market’s low end. General Motors Corp. has formed a joint venture with South Korea’s Daewoo Group to build cars for export to the United States beginning in the 1987 model year. Chrysler Corp. has been negotiating with the Samsung Group, another Korean conglomerate, in an effort to form its own joint venture.

Unlike cars from Japan, Korean vehicles are not subject to U.S. import quotas. The Japanese, said one analyst, “have a genuine fear of Korea. They don’t want to take on Korea in the low end of the market” because the Japanese want to retain the “upscale image” they have established with American consumers.

Focusing on the lower end of the market, however, might prove difficult for the Koreans if the U.S. economy remains strong, analysts said. “It may not be the ideal time to introduce small cars,” said Jean-Claude Gruet, securities analyst for Dean Witter Reynolds Inc. in New York City. Gruet reasoned that in a healthy economic climate, U.S. consumers are more apt to buy larger, more expensive cars.

Always a Demand

Even so, Gruet said that Hyundai still could find a market. “There is always going to be demand for less expensive cars,” he said.

Gruet, like other analysts, said Hyundai may find a strong market among used-car and first-time car buyers, who account for about 25% of all car buyers and generally are looking for a less expensive car.

Phillippi said Hyundai’s entry would be “very competitive with used cars.”

Another hurdle that Hyundai may face is one of image. Ann Knight, vice president at Paine Webber Mitchell Hutchins in New York City, said many U.S. consumers are not familiar with Korean cars and are unsure of their quality. But, she said, Hyundai’s model for the United States is “not a hunk of tin. People will be surprised.”