Skip to comments.We are worried about Hyundai: Toyota
Posted on 01/11/2006 5:06:44 AM PST by CarrotAndStick
Toyota Motor Corp, one of the world's most successful automakers, claims to be afraid of a lot of things: complacency, competition, and success itself.
But in the United States, rival Hyundai Motor Co may well be at the top of Toyota's list.
"We're worried about them," Yukitoshi Funo, chairman of Toyota Motor Sales USA, told reporters in Detroit this week.
"Our main competitors here are essentially Honda Motor Co Ltd, Nissan Motor Co Ltd and Hyundai, but Hyundai is the one we are very carefully watching," he said on the sidelines of the North American International Auto Show in Detroit.
South Korea's top automaker, until recently a target of jokes about broken-down parts, has dramatically raised its profile on the world stage with a benchmark study by research firm JD Power showing an improvement in quality to match the best Japanese brands.
Hyundai now sells far more cars than Volkswagen AG, Mazda Motor Corp and Subaru in the US.
It expects sales to rise more than 10 per cent this year to over 500,000 units, in an overall market that it reckons will shrink.
In 2005, Hyundai's sales fell 7.7 per cent to 418,615 units, giving it a market share of 2.5 per cent.
"The quality story is resonating," Bob Cosmai, Chief Executive Officer of Hyundai Motor America, said at the Detroit show.
"We're broadening the depth of our product line, and it's a great value story. When I joined the company at the end of 1990 we sold 90,000 cars, so we're making our presence really known."
Unveiling the remodelled Santa Fe sport utility vehicle at the show, Cosmai said its popular model would be priced "thousands of dollars" below a comparably equipped Toyota Highlander with six airbags, electronic stability control and other advanced safety features.
As Cosmai admits, Hyundai's path to success has been modelled closely on Toyota's strategy of striving for top quality and competitive prices, and appealing to a broad range of customers with wide-ranging cars.
That's what worries Toyota most.
"Honda and Nissan are also formidable rivals, but they have a distinct business approach and profile from us," Toyota's Funo said. "Hyundai, meanwhile, is essentially doing what we're doing."
But Funo added that Toyota would not and could not compete with Hyundai on prices, and would instead focus on building its brand and value.
"Our costs aren't as low as Hyundai's. We don't want to compete on their terms," he said.
His Hyundai counterpart, meanwhile, seemed to be adopting Toyota's characteristic modesty when asked how the South Korean company stacked up.
"I'm not sure anyone's a big threat to Toyota right now," Cosmai said.
"They're a very successful company," he said, adding that Hyundai benchmarked much of its processes and design characteristics around Toyota. "We have a long way to go."
Anybody that's driven or been a passenger in a recent vintage Hyundai will tell you they are building much, much better cars.
absolutely. hyundai's turnaround has been remarkable...
I see a lot of teens and young 20-somethings driving the sporty and sexy Hyundai Tiburon. If only they'd make a convertible out of the Tiburon, I'd pick one up as a 2nd car. The current Toyota Celicas are ugly and Honda never has done a convertible well.
About 8 or 9 years ago, I rode in a friend's Hyundai. It was a rattle-trap. The thing sounded and felt like it was going to shake itself apart, and it was only less than a year old. He had bought it after having had (and liked) a Saturn.
Last month, I rode in another friend's two year old Hyundai, and she loves it. It was really a very nice car.
I've owned Toyota Corollas for the last 16 years (I'm on my second), but when it comes time to buy another car (in about another 4 years), I'll give the Hyundai a serious look. Toyota has nearly priced the Corolla out of my budget.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
Maybe Ford and GM can hire some Koreans to run the companies.
I have a 1997 Elantra, now it's my husbands car since I drive the minivan. Wish they made a minivan! I love my Hyundai, and would buy another one in a minute. The car has 150,000 miles and keeps chugging along, quite nicely actually.
Here in So Cal the darn things are everywhere. I would imagine it is one of the hottest franchises for a dealer right now.
Toyota should be worried about Hyundai. I don't buy for a second that Hyundai has completely matched Toyota yet on quality, but they've dramatically improved. Toyota itself is starting to act much like the Big 3 did back in the 70s, when they thought they were invincible. That can come back to bite them if they aren't careful.
In their recent comparison of family sedans, Car and Driver rated the Camry dead last out of the four competitors - First went to the Accord, second went to the Ford Fusion, and third went to the new Sonata.
And the Camry's not invincible, so they'd better not get the feeling it is. Just from my personal experience, in the past two years, my 1998 Camry has cost nearly $1800 in maintenance and repairs to keep running (thank you Toyota for defective strut mounts that you claim aren't a widespread problem (BS)).... by comparison, my 1997 Taurus has cost only $230 to maintain, all but $50 of that being routine maintenance.
The whole point is that the auto business is one that if you rest on your laurels even the slightest bit, you'll get eaten alive. The big 3 have done that twice now, and they're suffering. That doesn't mean they don't make some good high quality vehicles (and some stinkers). There are quite a few models they make that are very high quality... But if Toyota doesn't shape up, Hyundai will pass them by, then Toyota will be looking for ways to pay for its aging and retired workforce while fighting a leaner competitor without those costs, just like the big 3 are doing now....
yeah they are going to love chinese cars in few years
For example . . . Toyota generally operates the most efficient auto terminals at various ports around the world. Toyota vehicles spend less time on their terminal lots than any other vehicle, which means their shipping costs for import/export vehicles are lower because they can run more vehicles through a terminal on a per-acre basis than any other company.
As of a couple of years ago, Hyundai auto terminals were actually among the least efficient of any manufacturer. In order for Hyundai to truly compete with Toyota they are going to have to improve in ALL areas of their business, and not just the quality of their cars.
I'd also add this . . . I'm seeing some very small "subliminal" signs that Toyota is facing a looming decline in its reputation for quality. If I were a betting man, I'd say that five years from now, Toyota's reputation for quality and reliability is going to be noticeably less than it is now.
they are living off the good reputation they created earlier maybe?
the large increase in volume of sales may hurt them in quality...itll be interesting to see if they can maintain that quality throughout.
I bought my wife a Hyundai Tucson last year. Great road safety car (six air bags, full-time all-wheel drive, ABS and stability control), drives great, six-year warranty on everything, ten year on power/drivetrain. All for just over twenty grand. Nothing all that fancy, but a solid vehicle overall.
Hyundai beat the bunch with their 10 year/100,000 mileea coverage.
Sorry about that. Fine built vehicles with a good warranty.
"best students from every graduating class of the Korean engineering schools"
You can't be proud of a ( heavily subsidized ) bunch of engineers who take 20+ years to get it right.
I consider the S2000 a roadster. It only seats two. I'd like my convertible to have back seats, even if an adult can barely fit in the seat.
Toyota has had its problems, (oil sludge springs to mind) but they are still the leader and the Prius has been a major PR coup for them. I predict continued success.
I had the new Sonata for a week (I review cars, among other things). I liked it a lot. It may not be quite up to the standards of a Camry, but it's a heck of a lot more fun to drive and its quality is close enough that the $$ savings and longer warranty makes it a good deal.
Probably closer to the Accord in "fun to drive" but nicer looking than either Accord or Camry, IMNHO.
My dad bought a Hyundai Elantra after having three Corollas that he loved. But as you say the Corolla priced itself out of his market.
He loves the Elantra.
They're not there yet, especially in the department of engine NHV specific output and MPG, but they are getting closer.
The other hurdle they have to surmount is resale values.
Check out the Kia minivan. Hyundai owns Kia. Same warranty and same (if not better) quality. My wife and I both drive Kia Sorento's (their mid-size SUV). Her's is 2 years old and has been great. So great in fact that when I needed a new car I bought one myself about 6 months ago.
Agreed, but their progress has been amazing.
They also need to get the proper pronunciation of their name more prominently in the public's mind....
Who is that hottie?
Re: your 321. My '03 Tiburon v6 is a healthy, economical speedster. The motors aren't bad, but the Porsch suspension parts, struts and clutch aren't built to take the 47,000 miles I drive a year. Brakes went at 80,000 miles, clutch at 78,000 and struts at 76,000. All my Rx-7's went up to 200,000 before replacement was needed.
Goody, if we pull our troops from Korea bet Hyundai could make good Tanks too.. maybe even Helos and personel carriers.. and with a nuclear capability would give North Korea something to think about.. Go KOREA, pull the/our troops, make TANKS...
Hyundai definately has improved their product immensely since the little boxy hatchback excel days.
They are going to be a big player if they keep on doing what they are doing.
Well honestly I personally fail to see the appeal of the Camary... its styling is a yawn, and its price is just too high.
If I need a family sedan, I can get one just as reliable for cheaper... or I can get one with more personality for the same of less as well. The Camary in my opinion is out of its market segment... too close in cost to the luxury brands, but not really a luxury vehicle, and too far above the cost of the utility brands for the added extras it gives.
And did I mention.. the styling is forget me always?
I agree. When I reviewed it I called it Vanilla, from a butterscotch fan.
I think in that class (of vehicles I've actually driven) I'd look at the Mazda 6 (especially the wagon), Sonata, and Accord.
Koreans are touch MF's. Believe me, I know. You don't want them running American businesses. Too many lawsuits, if you catch my drift. That being said, look at LG (who I worked for). They entered the wireless market in 1999 and now, I believe they're one of, if not the leader, in wireless handsets. But working for them was another story. Everywhere I go now I see LG (Formerly Lucky Goldstar for those of you who didn't know)electronics and appliances everywhere. I have an LG DVD/VCR player I'm looking at right now. THey make excellent, low cost goods. They're the force to be reckened with along with the other Korean force, Samsung.
I think they announced a minivan at the Detroit Auto Show.
Hyndai will succeed as people realize that cars are perhaps the worst investment one can make and given the percentage of total after tax income people commit to their vehicle purchases people will eventually wnat better value.
I think they need to decide what they want the Camary today to be...
If they want it to compete with the luxury brands, spruce up the styling and features and keep the same price point or close.
If they want it to be a segment leader with broad appeal... figure out a way to bring that price point down.
I think Camary is sort of trapped, they don't want to downgrade, but if they upgrade too much it directly competes with their luxury brand... so its slowly becoming an overpriced bastard child.
"And the Camry's not invincible, so they'd better not get the feeling it is. Just from my personal experience, in the past two years, my 1998 Camry has cost nearly $1800 in maintenance and repairs to keep running (thank you Toyota for defective strut mounts that you claim aren't a widespread problem (BS)).... by comparison, my 1997 Taurus has cost only $230 to maintain, all but $50 of that being routine maintenance."
My relative had a '99 Camry and that strut problem was indeed a problem. They even had struts on the rear end which I didn't realize. His new 2005 Camry doesn't particularly impress me. He's got some kind of rattle in it. I much prefer my new Escape Hybrid. I actually think the quality is a good deal better.
What the Hyundai has going for it is the warranty. That's nothing to sneeze at.
I have a 1988 Hyundai Excel with 285,000 miles on it. The only major problem was having the transmission changed. I have the oil changed every 3,000 miles. Car has a few minor problems but nothing that wouldn't be expected of a car this age.
I don't know, but I wish she were my girlfriend.
You're just lucky. I bought a new '89 Excel hatchback, and strictly followed all the maintenance schedules. Despite that, the engine had several catastrophic failures due to poor metallurgy and parts breakage. The plastics throughout the car were the worst I've ever seen. Some plastic replacement parts would fail after just 6 months!
I had that similar experience with a 76 Volvo. I had a 70 Volvo and liked it so well that I went out and got a new 76 top of the line Volvo SW. The engine had the cam shafts replaced every 11,000 miles, the electrical switches had to be replaced almost as often and the wiring that was used was terrible. After 24,000 miles, I dumped the 76 and my 70 was still running strong.
"absolutely. hyundai's turnaround has been remarkable..."
Are you taking notes GM and Ford?????
I'm speaking more of the last few years. It took the Japanese companies quite a while to get it right, too.
Sorry you've had the camry strut problem, too - hopefully Toyota will come to their senses, but I'm not holding out hope. The '87 Camry had horrible rust problems and body trim that fell off of every single one I saw around town, but Toyota didn't do anything about it....
As for the newer ones, I think they're good vehicles - but they have had persistent dash rattle problems, if that's what you're referring to. Another known problem overlooked by the press. And I'd like to see a little soft-touch materials instead of the hard plastic thats becoming over-prevalent.
As for the Escape Hybrid, the Mercury Mariner was named one of the most reliable vehicles on the road by Consumer Reports (if CR has credibility left), and as an identical twin, the Escape should be there as well. Add to that the fact that many of the hybrid components are made by the same company that makes the Prius components, and I think you've got a solid vehicle.
And I certainly agree - I doubt Hyundai's quality is as good as reported, but a 10yr warranty certainly makes up for the difference....
This is my second Escape and as far as I am concerned the quality is superior to the Camry. I couldn't be happier.
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