A lot has been said of the total U.S. auto industry sucking wind in 2009. Everyone is down. GM is down 30% and Ford is down 24%. Chrysler? Well, as most of you should know, the sick man of Detroit filed for bankruptcy and was sold to Italian car maker Fiat earlier this month.
The Japanese? No better as Toyota’s sales slid a whopping 41% in May and Nissan fell 33%. Ouch!
Hyundai/Kia’s sales in declined just like everyone elses, but did so at a far lower rate. Thus, their share of the U.S. auto market jumped from 5% in 2008 to about 7.3% today. This effectively makes Hyundai/Kia the sixth largest seller of cars in the U.S.
Adding to Hyundai’s momentum in the U.S. are the latest J.D. Power report on initial quality which ranks the nameplate first among non-luxury brands and fourth overall, ahead of Toyota (not including Lexus) and Honda.
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CNBC, I think (the past week is sort of a blur), did a very nice segement on:
the Hyundai Genesis.
To be honest, after living here for two years I would be more likely to buy a Korean-made car.
At least, I would if I lived in a big city with a lot of stop-and-go-driving. Especially if I lived in a place that had a lot of small hills and humidity like Korea’s, with a lot of rain but little snow and few really extreme temperatures in either direction (notwithstanding the current heat wave).
And of course if I were willing to overlook the fact that Koreans won’t buy anything American.*
* An exaggeration, but you know what I mean.
What do the rest of you think?
They’re happy enough to buy american, just not crap cars.
That kind of “feat” can be done just by standing still. Everything else just has to decline at a faster rate. Gee, what else would you expect when US auto companies are in restructuring and Hyundai still dumps their discount pseudo Japanese autos on the US market at discount prices?
You won’t find Hyundai among the leaders in brand perception. According to Consumer Reports, the top 10 in brand perception are:
Toyota – 193
Honda – 149
Ford – 109
Cadillac – 102
Mercedes-Benz – 100
GMC – 98
Lexus – 95
BMW – 95
Chevrolet – 94
Volvo – 88
In terms of quality, CR surveys place Toyota and Honda as “best by a wide margin.”
This Forbes report on Korean cars is interesting and hints that Hyundai/Kia is overreaching:
http://www.forbes.com/2003/05/06/cz_jf_0506flint.html
“Maybe the biggest problem is Korean carmaker management, which has shown a propensity for ego-driven decision-making, which is what got the Koreans into trouble a few years ago.
“Hyundai is building a big new plant in Alabama, which is to open in 2005. Whereas the Germans and Japanese started out slowly and expanded their U.S. plants as manufacturing expertise and demand grew, Hyundai plans to race into full-speed production in a plant that can build 300,000 vehicles a year. A new factory with new workers and new vehicles can mean trouble. It happened before. When Hyundai first entered the U.S. market it moved too fast, too, and even set up a plant in Canada. Then Hyundai had to backtrack, and the plant was shut. Will it happen again or will Hyundai and Kia just keep rolling? Right now they look good. Still, trees don’t grow to the sky.”
Mizar5, why the hate? Citing a Forbes article from 2003 is pretty irrelevant, I think.
Long time reader, first time poster.
So how does that 2003 Forbes article look now? If you ask me, pretty ridiculous, considering where Hyundai is at right now.
Thanks, Ray, cm.
However, the article still raises unresolved questions that are not in the least bit silly, cm. Hyundai/Kia is still far behind. To its credit, its new strategy has certainly begun to turn around the abysmal former image, but it still has a long way to go., and with the industry in such flux it is way premature to gloat.
Ray, by way of background, I have no hatred of Hyundai. In fact I was once employed there and had many friends and fond memories there, and wish them well. I am merely trying to place things in perspective.
From the US perspective, there are key economic and trade issues at stake. The US economy desparately needs a revived domestic auto industry and it is paramont to economic suicide to relegate manufacturing to overseas interests. To my knowledge there are no analysts of consequence who disagree with that assessment.
While the US auto industry makes its inevitable turnaround, a foreign auto maker dumping on the market is something to consider in the equation. While competition is an important tentet of capitalism, at this time, US interests mustcome first.
Those are the facts as I see them. Now, I happen to live in a small town now in which there is a relatively low income base, and, unlike the metropolitan NY area, where you seldom see Hyundais/Kias, you see them all over the place here. Obviously, there is a niche market for dumb hicks. What is ironic however, is that these are the very people who are protesting the loss of American jobs to unfair economic policy that favors outsourcing to foreign companies that undercut American costs.
That is to say, I am not faulting Hyundai or Korea as such for trade policy, but the US government and people, who should have seen this coming a long time back, as I did. The current economic crisis is in fact a good opportunity for people to make the necessary changes that they failed to make in their complascency. And yet, here are Americans still buying cheap foreign cars. What does it take to wake people up?
In summary, I wish Hyundai well within their niche, but do not project that they will take over the high-end quality niche in the US auto market.
Ford’s a buy if it goes back to 6.50
Huyndai bribes J.D.Powers and spends mega-bucks on advertisement.
Their cars? Looks good but not proven.
Comparing Huyndai to Toyota or Honda is just ridiculous. A Japanese conspiracy to blame Korean cars for the Detroit troubles? Are they shifting their blame to Koreans?
It is LA riot all over again. When the blacks got angry about White jury aquitting a white policemen for beating a black man, the media tried to blame Korean merchant for what happened.
Maybe all economic ills in America may be blamed on Huyndai/Kia.
The Japanese will love to see that.
#7
Don’t you mean “it is tantamount to economic suicide…”?
@baduk
I wish you would start your own blog. I never know what you are talking about, but I always enjoy reading your posts.
Baduk is an understated genious, an misanthropic humanist, a troglodytic inquirer.
Hyundai is just now starting to not be the “joke” brand. More people are not ashamerd to say “I own a Hyundai” in the states. However I have to agree that the ego can destroy the brand if not kept unchecked. The Hyundai superbowl 2009 ad was the least liked in many surveys nationwide. The ad showed Germans and Japanese businessmen crying while the “Korean” brand took first place. Many people felt it unwarrantedly “uppity?”
Hyundai is just now starting to not be the “joke” brand. More people are not ashamed to say “I own a Hyundai” in the states. However I have to agree that the ego can destroy the brand if kept unchecked. The Hyundai superbowl 2009 ad was the least liked in many surveys nationwide. The ad showed Germans and Japanese businessmen crying while the “Korean” brand took first place. Many people felt it unwarrantedly “uppity?”
Be careful, Acropolis7. It appears that you have a twin.
Moved back to Canada in April, after 12+ years in the ROK. Just bought myself a 2009 Kia Rio (Pride). About US$15 000 with A/C, etc. a 5-year, 100 000 km warranty, roadside assistance, 0% financing. I checked out Honda, Toyota, Honda, Suzuki, GM, Ford, and the rest. Best bang for the buck in my opinion. Kias and Hyundais are selling fast. (Could have gotten a Hyundai Accent for the same price, but I reckoned the Rio looked a little better.) Anyway, so far, so good.
I personally prefer Renault-Samsung cars. Best bang for the won.
You may seem them in the U.S. soon as Saturns.
I loved my Hyundai when I lived in Korea, but the over the top bluster of many Korean companies,including Hyundai Motors, continues unabated. In my years as an editor, I don’t know how many countless times I’ve come across a Korean company making outlandish claims of world-supremacy in the very near future. Hyundai continues to resort to ridiculous bluster, and though they will likely continue to improve on their image and strengthen their position vis a vis other carmakers, it’ll be a long, long ways before they could ever possibly overtake BMW, Porsche, Volvo, etc. in the premium brand market and more importantly, in terms of brand image.
Snow, you do realize that if you repeat something often enough, people will start to believe it, however ridiculous it may be? And if the actual quality of the product you’re offering is in fact improving, the incentive for trumpeting one’s horns becomes even greater. It’s a common theme in discussions about politics since operatives engage in it all the time.
Yes, you’re right JW. But if I were an investor looking to invest in Hyundai Motors, I would laugh at the ridiculous bluster and go ahead and invest despite its idiocy.
I test drove a Hyundai Genesis… I felt like I was in a reverse engineered Nissan Maxima/Infiniti I35. Every bit as good. The threw a little Lexus-like suspension and BMW-like road feel in there for good measure.
However, one thing missing were the computer controlled traction that spend up one wheel to stablize sharp turns. It’s not perfect, but it’s a pretty good car for the money.
Snow, investors with serious money to invest do not — i hope — pay too much attention to marketing campaigns.
Wangkon,
If you’re in Korea, save yourself half a dozen million and get yourself a Samsung SM7. Better yet, get an SM5 fully-loaded and save yourself even more. They are essentially Nissan Maximas.
http://en.wikipedia.org/wiki/Samsung_SM7
Hyundai has to toot their own horns, how else are they going to overcome the image of third world cheap labor exploited people somewhere in Asia or China, making shitty crappy cars that take away American jobs? At least for Hyundai, they’re backing up their big talk and ambitions with results. And look at the results, they’re far better cars than cheap worthless craps that Detroit builds and expects everyone in the world to buy them, even if nobody wants them (or else it’s treated as unfair trading, laughably).
Watched “The Fast and the Furious 3: Tokyo Drift” with some buddies a couple of years back.
A line in that movie made us all spit beers out of our noses: “You’re representing me now. What you think, I’m gonna let you roll in a Hyundai?”
Ahh…good times…
Hyundai brand is still known as “small & affordable family cars”, that is exactly why they are surviving. If Hyundai was listed as luxury brand, then they would have been close down by now.
# 26,
A line recited by a Korean American actor too. The irony…
# 24,
The traditional styling of Korean luxury cars hurts my eyes…
As someone who occasionally have to drive into some shady areas, I am always glad my car is equipped with the world’s most sophisticated anti-theft device…the Hyundai badge.
NK, heard it’s also a chick repellent too…
“Snow, investors with serious money to invest do not — i hope — pay too much attention to marketing campaigns.”
Let’s hope not, JW. But I saw this kind of ridiculous bluster in their annual reports and sustainability reports made specifically for investors.
“At least for Hyundai, they’re backing up their big talk and ambitions with results. And look at the results, they’re far better cars than cheap worthless craps that Detroit builds and expects everyone in the world to buy them, even if nobody wants them”
cm, tooting their own horn is one thing, but blustering away with totally ridiculous exaggerated bs is another, it just turns people off. And though I certainly did like my Hyundai and believe they are better than ever, it is ridiculous to say that Detroit only produces crap. Several of the new Big 3 vehicles are excellent quality and excellent value, especially in today’s market.
” This is your unmarked car? A Daewoo? Man, I know people. I can’t be seen in this thing. Open the door. I don’t wanna get Daewoo on my hands. ”
The last line was translated as “I hate compact cars” in the Korean subtitles.
http://en.wikiquote.org/wiki/Taxi_(film)
#28,
I must admit, the hood ornament on the SM7 is pretty tacky. Still, test drive one or an SM5. You’ll be pleasantly surprised.
Hey Baduk -
- “Huyndai bribes J.D.Powers and spends mega-bucks on advertisement.”
Who said that? Is that your Baduki?
Then, your Baduki just humilated J.D. Powers – the US’s renowned consumer satisfaction analysis report.
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