Skip to comments.The Charge Of The Korean Carmakers (Hyundai and Kia gaining ground in industry's worst year ever)
Posted on 07/21/2009 9:57:49 AM PDT by SeekAndFind
It's the worst year in history for the industry: Two Detroit companies went bankrupt, and even the Japanese are losing money. But nothing stops those Koreans. Hyundai and Kia are expanding their lineups, a new Kia plant is to open in Georgia, and they are setting most ambitious goals. Their cars may not be the best, but they are improving--many get on the "recommended" list in Consumers Reports--and they are getting major help from the home country's weak currency.
The two are connected under the name Hyundai Kia Automotive Group. Hyundai is larger and owns a 39% controlling stake in Kia. But here in the U.S. they operate separately and have different strategies that appear to be working.
At the end of six months, Hyundai sales of 205,000 cars and trucks were down only 11% from last year and Hyundai's market share was up to 4.3% from 3.1%.
Kia's 147,000 six-month sales were down only 7% in sales, and market share was up to 3.1% from 2.1%.
By comparison, Toyota ( TM - news - people ) sales were down 38% from last year, Honda ( HMC - news - people )'s were down 34%, Nissan ( NSANY - news - people ) down 33%. General Motors ( GMGMQ.PK - news - people ) down 40%, Chrysler 46%, and even Ford was down 34%.
"Slightly down is the new up," says one Hyundai man. They don't see any upturn coming yet, but it just makes them push harder.
The Koreans' ambitious goal is 1 million sales in another two years. Is it possible? It doesn't seem likely, but if they falter it might be that relentless drive and ambition that trips them up. But right now exchange rates are working for them, especially against the Japanese.
(Excerpt) Read more at forbes.com ...
The author believes the following factors benefit Korean carmakers :
1) The Korean currency has declined against the dollar while the Japanese yen has grown stronger. A car built in Korea and shipped to the U.S., taking into account various imported parts and other costs, has gotten 15% less expensive to build in dollars—while a car built in Japan and shipped to the U.S. has gotten 10% or so more expensive.
2) Clever sales incentives.
Hyundai came up with the idea of letting car payments pass if the buyer lost his job and just started selling a year’s worth of gas for $1.49 a gallon with a new car purchase.
Kia’s strategy is to load up its low-priced models with options that others charge extra for, delivering more car per car.
Don’t forget the ten-year warrantees.
Couple those factors with the fact that they make a pretty good car....and they stand behind it with a great warranty.
Haven’t needed my ten-year warranty at all so far - not a single mechanical problem at 62,000 miles on my 2005 Tucson.
The article points out something different about Hyundai -— Hyundai is now a full line car seller here, from low-priced to luxury cars. Next summer, they will have a luxury car costing $50,000 to $60,000, that’s a foot longer than the Mercedes E-Class, called Equus.
Hyundai is also creating low-end and fuel-stingy models called “Blue Edition” starting next model year. A new Sonata—that’s the midsize family sedan—comes next year, and there will be a hybrid Sonata, too, its first, with a new type of battery called lithium polymer.
The odd thing is this —— There’s no separate dealer group for luxury Hyundais.
Toyota has Lexus, Nissan has Infiniti, Honda has Acura, but Hyundai sells its $15,000 cars and $40,000 cars in the same showroom.
I wonder how this is going to play out... will the rich, monied people want to shop in the same place with the less well off ?
Hyundai invented the 10 year, 100,000 mile warranty about 10 years ago. Kia has it now, too but none of the other car manufacturers offer a better warranty to this day.
I spend a chunk of my year in our Korean factory, which makes the starters for a number of the Kia and Hyundai products.
The Korean manufacturers have been able to deliver on quality and value.
Further proof that COMPETITION IS GOOD.
I am looking at the Hyundai Santa Fe for next spring...my lease on my big Chevy will be up. I like what I see (esp. on paper...the price!). Anyone have any thoughts on the Santa Fe?
Have 80K on my Sonata which was built right here in the USA. Only had to replace the breakpads, and I put on Michelins because I don’t like Kumho. Best car I have every owned.
Our company CEO, who runs a $1.2 BILLION dollar company, just bought a Hynundai Genesis as his daily driver. He’ll let ANYBODY in the company drive it.
Of course, we’re trying to get the new Genesis starter contract, but it is a hell of a car.
I drove the Sonata earlier this year.
Not bad, and the MP3 player that uses USB “memory sticks” was a great idea. That, and the included Sirus radio made the 10 hour drives very enjoyable.
My father has a Lexus LS460 (his seventh Lexus since the very first LS400), and it’s in an entirely different league than even the Genesis. While Hyundai’s “luxury” cars offer the best value for the buck, they’re still not quite “LS” or “S” class vehicles.
And I haven't driven one but the Hyundai Genesis coupe looks sweet!
Hyundai has a plant in Alabama.
I think they’re in CA, as well.
If your cousin was UAW, he’s gonna have some difficulty.
Southern “import” plants aren’t too keen on former UAW personnel.
Too much baggage and they know why The Big Three are in dire straits.
That's a silly question. In the '70s the Lincoln-Mercury dealers had showrooms with Bobcats sitting next to Continentals. They did just fine.
Hyundai Motor Manufacturing Alabama, LLC
700 Hyundai Blvd
Montgomery, Alabama 36105
I think putting all the cars in one showroom gives you a better shot at upsell. If it turns out I can afford a Lexus but I’m at the Toyota dealer I’m probably not going to get a Lexus. If I can afford a high Hyundai I’ll find out there.
Our next purchase will be a slightly used Sonata based on the research we’ve done.
I have a 2001 Elantra with 145,000 miles on it. I drove it off the lot with 8 miles on it in 2000 and it has been a fantastic car. Gas mileage is great, runs well, has been paid off for over 5 years. I am looking to the Sonata as well when I finally do trade it in.
We looked at Hyundai's sedan versus the Honda Accord four years ago, and the Accord's interior was just nicer; better fit and finish. We went with the Accord, but next purchase we'll revisit the Hyundai product line.
My wife does drive a Hyundai Santa Fe as it delivered the best features for the cost in the small SUV market.
I can’t bring myself to buy a car with the initials for Killed In Action. Just sayin’.
Hyundai has really compressed that transformation. It's a good, solid car, especially for the price.
I had a co-worker with one, he really liked it.
The new big three US automakers will be Ford, Toyota and Hyundai. GM and Chrysler under government management are toast.
I had a yellow 74 Civic once.
It was in great shape.
Believe it or not i traded a CB radio and antenna for it.
My buddy had 2.
I got it to use as a winter car but after driving it once I parked it next to my garage for the next 4 years mever to be used again. (by me anyways)
Owned a Santa Fe for almost six years, a great car—especially for the price. My next car will also be a Santa Fe. 75,000 miles with no major problems!
1985 seemed to be a major turning point.
UAW means do not hire. If I had ever worked in a unionized shop I'd blank that out of my resume.
I remember when Hyundai first started selling in the US almost 25 years ago—remember the Excel? Those things were jokes. Terrible interior finish, ugly styling, and horrendous mechanical reliability. But they were cheap, and they sold well, until word got around about what pieces of crap they were!
Hyundai has really turned it around since then. The 10/100 warranty was obviously a shot at silencing the reputation they picked up with the original Excel, and it worked. I never hear anything bad about their cars anymore, as witnessed on this thread. They’re definitely worth looking at, and it’s ironic to see somebody beating the Japanese manufacturers at their own game of low cost and high quality, just like they did to Detroit 30 years ago.
Wow, it wasn't even worth $1k.
But I did drive the heck out of the '74. Think I eventually traded it in on a Z car.
ROTFLMAO! Even though I'm a Korea-phile, that is just too funny!
Even though the Korean carmakers don't have union problems in the USA, they do have union issues in the old country. The Chosun Ilbo, one of Korea's oldest papers wrote an editorial shortly before or after Obama took office warning Hyundai in particular that if they don't get a handle on their own union that they could repeat GM's history in another 30 years. I hope Hyundai took them seriously.
Tell me about it.
We’re having a “strike” ChangYeong right now.
Apparently, all it take to unionize in Korea is TWO EMPLOYEES.
We’ve got supervisors and managers running the place now.
Thank God for the economic “slowdown”.
I’d hate to see the warrenty claims in a few months ;)
The Koreans and Suzuki are the only auto makers selling in the US value. Toyota and Honda have priced themselves to oblivion, and most of the US “value” models are no real value.
GM finally puts out a reasonable small car, finally getting rid of the crap cavalier and then wants 16k for a base model because they claim its so fuel efficient people will pay 3-4k more than the competition for 35mpg? There is no wonder why GM went belly up.
Ford’s focus is long past due for a true update, sorry the sheet metal update can only stop gap, you need the true new model that’s over in Europe here, and you need to get that KA here too.
There is little doubt the Koreans are the value brands today, with Suzuki as well.
The first Japanese cars were crap... but they slowly kept improving and learning... Now they charge far too much of a premium for their brand names IMHO.
Hyundai’s plant in the US is in Montgomery, AL. Kia is building one in the southern US too.. can’t remember exactly where.
I believe that US law protects car buyers from strict service requirements.
The dealer/company cannot force you to have service at a specific place, unless you specifically sign a separate contract (like for the free BMW maintenance).
They’ve begun posting notices to this effect at the Jiffy Lubes, because of dealers’ unscrupulous practices.
Thanks, good to know, since I do a lot of work myself.
I remember the Excel painfully well. I bought a 1989 hatchback. The overall mechanical design wasn’t too bad, but the metallurgy was bad and the plastics were terrible. The resale value was zip.
The Koreans will have their run in the next decade, but then be trampled by the Chinese, as they ramp up quality and design.
As holders of so much US debt, the Chinese will be in a position to fend off any potential trade sanctions no matter what the Baraqqis may try and tell us.
I agree — I haven’t had a single problem with my Hyundai XG350 in 5 1/2 years. They do make a great car.