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.
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