MOTOR COMPANY REACHING A TOPNOTCH AUTO COMPANY October, 2004

MOTOR COMPANY 2 I. Auto Industry : National Economy’s Backbone

MOTOR COMPANY 3 Auto Industry = Total Package of Industries Manufacturing autos, production of parts Steels, chemicals, rubbers ….. Auto sales/maintenances selling parts … Installment finance, auto insurance … Stationaries, petroleum refinery, lubrication ….. Passenger/freight transportation, parking lot, auto lease …. Auto Production Processing Raw Materials Auto Sales and Maintenance Oil IndustryFinance and Insurance Transportation and Utilization

MOTOR COMPANY 4 Popularization World Economy Domination Gain Huge Economic Power Auto Industry Concentration Economic Take-Off A Country with Strong Auto Industry leads the World Economy Late 19th Century Early 20th Century Late 20th Century 21st Century Invention & Supply Globalization W. Europe USAUSAJapanJapan New Comers Stream/Galoline Auto Invention Growth of Ford & GM Fast Growth After the Oil Shock Korea, China, etc Economic Take-Off

MOTOR COMPANY 5 Auto Production Amount by Countries (2003) Growing Auto Industry Leads to a Developed Country GDP/Capita (2003) Data: Korea Automobile Manufacturing Association,,Bank of Korea 10,150 1st : USA 2nd : Japan 3rd : Germany 6th : S. Korea 5,500 3,280 12,140 37,748 US $ 33,720 US $ 29,201 US $ 12,646 US $ Thousand

MOTOR COMPANY 6 23 Billion US $ -> 12% of Whole Industry 23 Billion US $ -> 12% of Whole Industry Auto Industry Is the “BACKBONE” of Nation’s Economy Data: Korea Automobile Manufactures Association,National Statistical Office Production 58 Billion US $ → 11% of Manufacturing Industry Added Value Export Tax 22.5 Billion US $ → 11% of Manufacturing Industry 17.5 Billion US $ → 18% of Total Taxes (1200 Won = 1 US $)

MOTOR COMPANY 7 Auto Industry Accounts for the Largest Portion of Employment Automotive Semiconductor Steel Shipbuilding 280,000 people 170,000 people 90,000 people 60,000 people Auto industry creates more jobs than any other industry Auto industry creates more jobs than any other industry -Directly/indirectly: 1.5 million employments -Directly/indirectly: 1.5 million employments EMPLOYMENT SCALE Data: Korea National Statistical Office

MOTOR COMPANY 8 2. Company Overview Ⅱ. Heading Towards a Topnotch Global Company

MOTOR COMPANY 9 40 Years of History ’67’76’86’91’91’99’99’96’00’02’02 ’03’03 ’04’04 Export to The US Establishment of HMC Development of Independently Design model : PONY 10 million cars in total sales volume Development of Proprietary Engine HMC separating From Hyundai Group Factory in China: into operation Export of 1.75 Million per year Acquisition of KMC 10 million cars in Total export HMC INTO A GLOBAL COMPANY Beginning to construct The US Plant Beginning to construct European Plant

MOTOR COMPANY 10 Global Sales : 7 th World ranking KMC Total HMC 1,460 Million US$ 20.8 Billion US$ 50, Million US$ 10.7 Billion US$ 30,000 2,049 Million US$ 31.5 Billion US$ 80,000 8,590 Thousand * Number of global sales Global Sales (Year 2003) 6,780 Thousand 6,540 Thousand 5,020 Thousand 4,360 Thousand 3,290 Thousand 3,050 Thousand (Number 7) 2,910 Thousand 2,290 Thousand GM Toyota Ford DCX PSA Honda Renault 2,970 Thousand Nissan VW Data: MARKET DATA BOOK ( ’ 04, AUTOMOTIVE NEWS ) HMC/KMC Revenue Employment Net Income

MOTOR COMPANY 11 Regional Headquarter : 10 Import Agencies : 320  Dealers 7,750  A/S 8,500 North America 800,000 (46%) South America 80,000 (5%) Asia/Oceania 260,000 (15%) Africa/Middle East 170,000 (10%) E. Europe 70,000 (4%) W. Europe 370,000 (21%) Exporting 1.75 Million Vehicles to 185 Countries (’03) ( ) : percentage

MOTOR COMPANY 12 Turkey Hyundai : Taiwan, China, Egypt, Pakistan, Sudan, Russia, (210,000) Venezuela, Malaysia, Indonesia, Iran Hyundai : Taiwan, China, Egypt, Pakistan, Sudan, Russia, (210,000) Venezuela, Malaysia, Indonesia, Iran Kia : Iran, Egypt, Philippines, Vietnam, Pakistan, Malaysia, (300,000) Ecuador, Morocco, Russia, China, Indonesia Kia : Iran, Egypt, Philippines, Vietnam, Pakistan, Malaysia, (300,000) Ecuador, Morocco, Russia, China, Indonesia CKD Assembly Plant India Korea China USA , Construction begins (’05. 3) Year ‘03Year ‘04 3,5103,760 Unit ; 1, Europe 300 Construction begins (‘04.4) 3.8 Million Global Production Capacity

MOTOR COMPANY ‘ 75 ‘ 80 ‘ 85 ‘ 90 ‘ Propriety Models : 55 ▷ HMC 34 + KMC 21 FULL-LINE UP HMC/KMC : 28 (’03) FULL-LINE UP HMC/KMC : 28 (’03) (Accumulated) The 1 st Proprietary Model: Pony Full Line-up

MOTOR COMPANY Competitiveness Ⅱ. Heading Towards a Topnotch Global Company

MOTOR COMPANY 15 Shortly, HMC/KMC Became Global Maker HMC/KMC has the “world speed record” for 3 million autos production BrandEstablishedyearCompany’sAge HMC/KMC yrs Toyota yrs Nissan yrs VW yrs Ford yrs Peugeot yrs 36 years (Year 2003) (1990) 52 years (1977) 40 years (1980) 47 years (1971) 105 years (2001) 68 years Period reaches to manufacture 3 million autos

MOTOR COMPANY 16 R&D Capability Reached World-Wide Level 1 st Stage 2 nd Stage 3 rd Stage 4 th Stage Importation of Techniques (1967~1975) Development of HMC’s unique model (1976~1984) Technical Independence (1985~1990) Technology Competition (1991~ ) 1967 : Established HMC 1967 : Established HMC 1968 : Cooperation with Ford Co : Cooperation with Ford Co : Built Korea’s first own model: Pony 1976 : Built Korea’s first own model: Pony 1982 : Developed Stella (mid-sedan) 1982 : Developed Stella (mid-sedan) 1986 : Exported Exel to the US 1990 : Reached 1990 : Reached 1 million sales in US 1991 : Developed Korea’s first own Engine 1991 : Developed Korea’s first own Engine 2000 : Developed common rail diesel engine 2000 : Developed common rail diesel engine 2003 :Sold Engine technology to DC and MMC 2003 :Sold Engine technology to DC and MMC

MOTOR COMPANY 17 Top Class Quality Surpassed Toyota, BMW, Ford, Nissan in Quality (J.D.Power) HMC: #7 from 37 global brands (#2 from 14 companies) “Man bites dog” -Automotive News Comparison of HMC’s IQS in the US market HMCAverage Year 2004 ’ sIQS Year 2004 ’ sIQS 1st: Lexus 87 1st: Lexus 87 7th: HMC 102 7th: HMC 102 9th: Toyota 104 9th: Toyota nd: BMW rd: Ford rd: Ford rd: Nissan rd: Nissan 154 Data: J.D.POWER and Associates

MOTOR COMPANY 18 Development of Advanced Engine Tech. & Exportation Overview Meaning Multi-injection Engine having a various range of proprietary gasoline engines Year 1999 Environment friendly diesel engine High in horsepower / low in noise Year 2000 World ’ s first liquefied injection in LPG engine 2 years ahead of Toyota Year 2003 Exportation on Engine Technology Middle size engine Joint Production with DCX and MMC 1.5 million per year (world’s biggest in scale) 1.5 million per year (world’s biggest in scale) HMC, DCX, MMC vehicles HMC, DCX, MMC vehicles Latest Gasoline Engine Advanced Diesel Engine LPI Engine (LPG) Development

MOTOR COMPANY 19 Santa Fe electric vehicle started its drive in Hawaii (2001) Santa Fe electric vehicle started its drive in Hawaii (2001) Development of Click Hybrid (Oct. 2004): Development of Click Hybrid (Oct. 2004): 50 cars were delivered to Korea Department of Environment 50 cars were delivered to Korea Department of Environment Sales will start in 2006 Sales will start in 2006 US DOE (Department of Energy) Award (April 2004) US DOE (Department of Energy) Award (April 2004) : Hydrogen Infrastructure & Fuel Cell Vehicle Demonstration : Hydrogen Infrastructure & Fuel Cell Vehicle Demonstration Development of Environmental-Friendly Vehicles Reaching World-Class Technology ▶ Corresponding Future Environment Standard ▶ Corresponding Future Environment Standard

MOTOR COMPANY 20 Domestic ( ’ 95 ~ ’ 04) Overseas ( ’ 95 ~ ’ 04) Changing of IP Management from Quantity to Quality ’ 04 ’ 03 ’ 01 ~ ’ 95 ’ 97 ’ 99 ’ 04 ’ 03 ’ 01 ~ ’ 95 ’ 97 ’ Patent Pending Patent Registration 2,0004,0006,0008,000 50, ,000

MOTOR COMPANY 21 USA : Auto Sales Doubled During The Last 4 Years HMC/KMC Sales Volume/Market Share 4.1% Market Share in the US (2004 Jan~Sep, selling 520,000 cars) 20 만 40 만 60 만 Sales Volume 4% 3% 2% Market Share % 2.3% 3.3% 3.7% ▲ ▲ ▲ ▲ Sales Vol. Mkt Share ▲2003 ▲ 3.9% 2004 F ▲ 4.2% (DATA:: AUTOMOTIVE NEWS DATA CENTER )

MOTOR COMPANY 22 Extremely high speed in growth created popular word--“Hyundai Speed” Extremely high speed in growth created popular word--“Hyundai Speed” (Established Beijing Hyundai Motor in November 2002 (Established Beijing Hyundai Motor in November 2002 → In 2003, 52,128 vehicles were sold) Beijing Hyundai was nominated as “fast growing company with high potential” Beijing Hyundai was nominated as “fast growing company with high potential” China : Extremely Fast Growth  “Hyundai Speed” Year Total Production Capability Hyundai Kia HMC/KMC Production Plan in China (Unit: thousand)

MOTOR COMPANY 23 India : Becoming #2 Auto Maker During The Last 3 Years Sales - 60,000(’99)→150,000(’03)→220,000(’04) - Santro, Accent, Sonata, Best selling cars in each segment Great Contribution (Indian Economy) - Created 50,000 employees - Recorded number one in tax payer in state of Tamiladu, India HMC’s Market Share In India

MOTOR COMPANY 24 US Technical Research Institute [Chino] Technical Research Institute, Japan [Chiba] California Proving Ground California Design and Technical Center Europe Technical Research Institute (Ruesselheim) Design Center Localization of R&D US Technical Research Institute [Ann Arbor]

MOTOR COMPANY Mid/Long Term Goals Ⅱ. Heading Towards a Topnotch Global Company

MOTOR COMPANY 26 HMC/KMC Mid/Long Term Goals ValueInnovator Brand Image Smart Buy More than 5,500,000 (2010) Sales 2,930,000(2002) Advancement to China Advancement to USA Periods ~ ~ ~ 2010 Advancement To Europe

MOTOR COMPANY 27 Thank You Always there for You!