Trials and Hardship

After reentering the passenger car market in 1987, Kia achieved rapid growth by introducing
a series of original models and surpassing one million exports. However, the heavy investment
required for new model development and expanded production placed a severe financial burden
on the company.

The pressure only intensified with the liquidity crunch brought on by the Asian financial crisis.
In July 1997, facing the greatest crisis since its founding,
Kia was provided with a court-arranged standstill agreement¹.

As Kia faced the risk of bankruptcy, a movement emerged with the support of
civic groups, labor organizations, and cultural figures. A shared consensus grew around the
belief that a company which had long stood with the people should be protected.
Movements such as campaigns to purchase Kia vehicles, signature campaigns,

and pro bono appearances by popular celebrities in advertisements reflected
the wave of solidarity and encouragement. Yet, despite these efforts,
Korea’s economic crisis meant Kia’s recovery was still uncertain.

In October 1997, only three months after entering a court-arranged standstill agreement,
Kia was placed under court receivership. By May of the following year, the process of selling Kia
to a third party was set in motion. Hyundai Group, the parent company of Hyundai Motor,
officially declared its intention to acquire Kia, and after an international bidding process,
Hyundai Motor was selected as the final acquirer.

Behind the successful bid lay the conviction of
founder Chung Ju-yung and the drive of Honorary Chairman Chung Mong-koo.
They believed economies of scale were essential for Korean automobiles to compete globally,
making the deal a pivotal turning point for the domestic auto industry.