In the aftermath of Black Hole Tuesday (June ’08 sales numbers), a big story got lost in the vortex. Yes, The Big 2.8 tanked, Toyota and Nissan took hits to the jaw and Honda was proclaimed the new Messiah. But June’s unsung winner puts Honda’s accomplishments to shame. In the midst of a violently contracting U.S. new car market, Hyundai-Kia (“HK”) kicked ass. And that butt-whooping is a direct threat to Detroit’s survival.
Forget Honda’s 1.1 percent June increase. HK sakes jumped 3.5 percent; its best month ever. Its 28 percent profit growth in the first quarter dwarf’s Honda’s eight percent increase. Even more significantly, HK knocked Honda out of the global number five spot. And ominously for GM and Ford, Hyundai’s dramatic growth has become a crucial obstacle to success with their belated shift to smaller cars.
For decades, Toyhondissan has represented the evil empire eroding the reign of the house of Detroit. But as the Johnny-come-lately party crasher, Hyundai-Kia’s damage has been swift, surgically-precise and (potentially) deadly. HK’s share of the US market is up to 6.6 percent, surpassing Chrysler’s passenger car share (5.2 percent) and closing in on Ford’s 10.2 percent.
Hyundai’s Sonata handily outsold GM and Ford’s great white hopes, Malibu and Fusion. Add in the similar Kia Optima, and the HK twins are right at Altima levels (24k/month). Yes, HK’s larger SUV/CUV’s were not immune to the market shift, but their smaller cars more than made up the difference: Accent up 70 percent, Elantra up 50 percent.
And it’s not just the bigger and older brother in the family that’s hitting on all its (Tau V8) cylinders: Kia also had its best month ever, selling 28k cars, up 7.6 percent.
But the really big show is on the global stage, and that’s where HK is kicking serious butt.
HK is by far the fastest growing major car manufacturer, period. Rising from the number eleven slot in 1999, HK passed Nissan in ’05. In ’07, it passed Honda to join the ranks of the G5: Toyota, GM, VW and Ford. Although the jump from HK’s 3.9 million global units to Ford’s 5.9 million is daunting, don’t assume HK are happy where they are.
What’s driving HK’s industry leading global growth? Sheer will-forces, it would seem. The rapid Korean industrialization literally created the term “Asian Tiger.” And while Korea Inc. has clearly had Japan Inc. in its visor, Hyundai has Toyota in its. It may be indulging in stereotypes, but Koreans are noted for their stubborn and tenacious aggressiveness. Does that not perfectly describe Hyundai?
Here’s a company that boldly plunged into the U.S. market just over twenty years ago, setting records for a new brand introduction– only to have their hats handed to them over quality and reliability issues with the Excel. But they tenaciously stuck with their program of continuous improvements (I’m looking at you GM) to shed their shoddy image.
And now HK have an enviously complete line-up of cars and CUV’s including the rather remarkable rear wheel-drive Genesis sedan and Coupe (2009). Yes, TTAC’s review of the Genesis gave it three stars for its vanilla flavor. But the Genesis program is another substantial step forward. Keep in mind, Hyundai aspires to be the next Toyota, not BMW. In that context, the Genesis sedan is a remarkable accomplishment.
The Genesis Coupe raises the bar even higher: a potential segment buster; something that Toyota can only look enviously upon. And there’re more goodies in the pipeline: the Kia Soul looks a potential gen1 xB successor, and the Kia Forte just looks…good.
While HK has carved out an enviable and solid position in the US, its global growth and reach is much more dramatic. The new i10 is the hot new developing-world mini, having taken India by storm, capturing the I(Indian)COTY award.
Huge new factories are coming on-line in China and India, and the rest of the world is booming for Hyundai. The i30 compact has been a substantial success in the difficult European market, with Golf-competitive looks and dynamic qualities. HK claims to have the most balanced global position of the Big Global 5. Their home market is still healthy, unlike the Japanese, US and increasingly, the European, markets.
Hyundai’s meteoric rise is another nail in the coffins of GM and Ford, both globally and domestically. HK is growing substantially faster in the developing world, blunting Detroit’s ambitions for profits abroad. Closer to home, Hyundai is part of Toyhondisshyunkia: a solid bloc controlling almost 50 percent of the U.S. passenger car market.
Ford’s coming Euro-global car line-up looks appealing. GM is… working on theirs. But will car buyers care enough to generate the market share, volumes and profits they desperately need? “Thanks” in part to Hyundai, I wouldn’t count on it.
Hyundai sold Acura Legends in Korea re branded as their own. The cars were shipped in knocked down and built locally. No wonder that Hyundai learned how to make better cars.
The long warranty, reliable quality and good designs were a hit with Americans who were skeptical of Hyundai from the Excel days.
And now that they are employing Americans here building cars in places that need the work how can they be called a threat any longer. Sure profits may end up overseas, but paychecks get cashed here. Plenty of Ford, GM and Chrysler money ends up overseas too, not all is repatriated.
When I see the accompanying pic for this article, I can’t help but think “Ho-hum, another Tiburon.”
I hope I’m wrong.
Good article. Thanks for the info.
Hyundai’s rise in the last ten years has been pretty remarkable, even moreso in the last five years. Their improvement seems to be accelerating, their models look better and more oringinal all the time.
This is the company Toyota has to worry about.
Forte > Corolla
Genesis > IS/ES/GS
Soul > xB
Veracruz > RX
Sonata > Camry
Hyundai hybrids coming soon, yeah, I bet Toyota is a little worried.
gamper: This is the company Toyota has to worry about.
+1
Korea really is following in Japan’s foot steps – in the 70’s and early 80’s Japanese products were thought of how Korean products have been for the last 10 years or so – cheap knock offs. Then all of a sudden they became innovators and leaders in electronics and vehicles.
China appears to be following Korea now. I wouldn’t rule them out – they appear to be fast learners like the Japanese and Koreans have been.
To be fair, I think that a lot of those US sales may have gone to fleet, particularly to rentals. Hyundai built the factories before they had the customers, on the assumption that the customers will eventually discover them.
In the meantime, the cars have been going to rental until a market of retail buyers can be built to take their place. Not sure if they’ve gotten there yet, although I’m sure that they will eventually.
Unlike the domestics, Hyundai is maintaining high levels of quality even for rentals so that their reputation is ready for their future customers. If you are going to use fleet sales to manage your overflow production, this is the way to do it.
I think Hyundai and Kia have been under the radar for a lot of people. There’s been so much emphasis on Toyota vs. GM and Ford, etc. that some haven’t even noticed HK’s rapid growth. I’ve been following the message boards at GM Inside News and the focus has been on bashing Toyota if you love GM and vice versa. I’ve seen no one there mention HK. And I think HK have hurt GM car sales more than anyone. A decade ago you bought a Cavalier if you wanted a small, inexpensive car. Where are those people going now? HK. At least from my observations around me.
This should be mandatory textbook reading for anybody in Detroit! Did we really NOT see this coming? Continued refinement of product, vehicles that are actually desired by the buying public and prices that are nit hyper-inflated. Yeah, I’d say HK is on a roll. A far cry from the Excel, but as has been stated above, instead of sticking their heads in the sand and crying foul, they drove continuous improvement into their product line and now we see the fruits of their labor and the very real possiblity of HK becoming a major force in the automotive world.
American Manufacturers complain about a false image problem. HK also has a false image problem. People think of them as cheap transportation. Even though they are getting better and selling more its going to take a while to shed that image.
Are we talking about the two- and three-star Hyundais and Kias?
What’s driving HK’s industry leading global growth? Sheer will-forces, it would seem.
What nonsense. The Elantra and the Accent sell because they’re cheap, they’ve got a decent warranty, and they don’t suck gas. Cheap, cheap, cheap. There’s no magic here; they cram in more features for the dollar, or simply undercut the pricing of everyone else. Korean stereotypes and “will-force” having nothing to do with it. Any company willing to assume the lesser profit margins of a ‘retrenchment’ strategy can emulate Hyundai’s success.
Something else of note: when you’re sitting on the bottom, there’s nowhere to go but up. When Hyundai creates a properly good vehicle, sells it in the hundreds of thousands, and then ruins it with a poorly conceived styling refresh, that’s when you’ll know they’ve arrived.
Did I just mention that my IT guy traded in his Crown Vic for a Genesis…um, yeah…
As a side note, I got my Sonata because of a Sonata I rented from Enterprise. I would have gotten a Mazda 6, but the insurance quote for that was markedly higher than the V6 Sonata. I guess the word that ’06, ’07 3.3 liter Sonatas don’t have speed governors didn’t get to Geico.
See this works GM? When you give your crap cars to the rentals it sort of leaves a bad impression.
The Malibu I rented was the only GM product I actually enjoyed driving. The Pontiac G5 on the other hand was a hot mess. I felt like I was in a Fisher Price contraption.
But wait, hasn’t Peter De Lorenzo been saying Hyundai and Kia’s unsold wares have been stockpiling in North America for months?
Oh, who am I to believe?
I remember reading an interview with the CEO of Toyota. The last question asked was,”Look over your shoulder, what company do you see coming up behind you?”. The answer: Hyundai. He stated they have adopted and implemented Toyota’s philosophy of continual, incremental improvements better than any other company in the world. Their cars aren’t just cheap. They’re a good value. There is a difference. Toyota, Honda, and Nissan(Datsun) were once derided for being ‘cheap’. My how things change. It wouldn’t surprise me if in another 10 years Hyundai or even Kia are spoken in the same breath as the new big 3. (That would be Toyota, Honda and Nissan in case you were wondering.)
And I still wouldn’t buy anything they produce personally.
Perhaps the Korean success in our country further confirms WAL-MARTIFICATION of America and that people will buy cheap goods for a cheap price en mass, which just so happens to be Hyundai-Kia’s business model.
Also, I find it a little funny that the press is filled with how improved H-K’s products are yet they hardly ever win any comparisons and they still come in last in many recent ones that I’ve read from CU to Edmunds. Yet people heap praise on their products.
Meanwhile GM has made a concerted effort to produce better products that are improved in nearly every way and that tend to do well in comparisons though they don’t quite win them, yet people won’t even look at them.
I guess Americans are fond of eating their own too.
The H-K renaissance has been impressive, but whether Korea is going to be the new “Japan Inc.” remains to be seen. Checking the various blogs where owners relate their car experiences, H-K do not have the kind of bullet-proof rep that Toyota and Honda did in the 70s-80s. Street-cred counts for a lot more than some marketers realize.
There’s some potentially good news for the D3 in this. Not too long ago, Hyundai vehicles had all the appeal of a big stinking pile of dog feces. In a rather short time span, they have become a serious contender with some reasonably good products. If the D3 would learn the right lessons, they might be able to emulate some of Hyundai’s success.
I think with new leadership and after being completely broken down and rebuilt the D3 can make a comeback post-bankruptcy.
Car makers reputations don’t change overnight. Kia made a fairly bad impression at first. But their warranty allays most reliability fears and, at least by my test drive in the 08 Optima, they are making some pretty decent (if bland) cars for exceedingly reasonable prices.
So they’ll keep on chugging and the rep will change with time.
TriShield
Actually, the Sonata placed second in Motor Trend’s recent review of 10 4-cylinder family sedans, ahead of the Accord and Camry, but behind the Passat (what?!).
Consumer Reports gave the 4-cylinder Sonata a higher predicted reliability rating than the Accord or Camry and chose the Elantra as the best pick for a small car, edging the Civic by a hair.
So Hyundai is getting recognition, and I think it’s warranted.
I think its a convergence of a lot of factors mentioned here. They’ve demonstrated a remarkable tenacity in improving their products. Think of the leap each Sonata and Elantra made with every passing generation. Comparatively, it’s been huge.
Moreover, Hyundai has offered big incentives, even for bread-and-butter cars. I remember a couple of months ago the ads for a 2008 Sonata at $14k. You look at the list of standard features, and its not even close, when you compare a Toyota at a similar price.
All of this equals big sales. The big question is whether they can sustain growth as they move up market and, presumably, reduce incentives on bread-and-butter cars.
I remember reading an interview with the CEO of Toyota. The last question asked was,”Look over your shoulder, what company do you see coming up behind you?”. The answer: Hyundai. He stated they have adopted and implemented Toyota’s philosophy of continual, incremental improvements better than any other company in the world.
That’s the whole story, right there.
Think I’ll buy some HK stock.
Oh … and I hate to sound like I’m harping on one poster, but as to Americans “eating their own” … While GM still makes most of its cars here, Ford has been in clear in that they want to make cars south of the border.
Many Hyundais (like many Toyotas, Hondas, etc) are assembled here. While quality and overall product comes before patriotism, I’d rather have my money go to American workers, rather than pledge to an American corporation shipping jobs elsewhere.
Until the American workers get too powerful of course, then those jobs will get sent elsewhere just as quickly.
Very interesting editorial. Also, many, many interesting and inciteful comments.
Does anybody know if HK are buying market share? Are H/K subsidzing profits on US sales for the mid term to gain market share? If so, will they pump up US prices to be more in line with Toyota in the future?
I strongly suspect that Korean management like strong profits just as much as Japanese management. It’s strickly a guess, but I’ll bet that H/K’s US profits are temporarily lower than H/K would like them to be.
What’s driving HK’s industry leading global growth?
Don’t forget bribery!
While I think a lot of TTAC readers will find Hyundai vehicles to be boring, we aren’t the typical auto buyer.
I rented an ’08 Sonata last summer after a car accident. (I ended up buying an ’07 Accord.) I was impressed. The car was somewhat soulless, which is why I didn’t buy one, but I could see a lot of people thinking it would be perfect for them. It was easy to drive, seemed very well made, had reasonable zip for a 4-cylinder (even with the slushbox) and was roomy.
I owned a ’90 Excel for nine years (I basically wore it out) and it’s clear that that Sonata shared next to nothing in common with the Excel. That’s how far Hyundai had some in 17 years.
Toyota makes a fortune selling cars that I feel are rather soulless, but good, and Hyundai is copying the formula to a T. I expect to see tremendous success here for years to come.
I bought the first V-6, top of the line, Sonata sold in Austin. I liked it so well that 18 months later, I traded up to a dealer’s program Azera Limited.
Both of these vehicles have been worlds more reliable than the “premium” makes I have owned (Mercedes, BMW) and just as reliable as my Acura Legend. Total problems have been the windshield washer pump on the Sonata and a loose connector on the Azera, both fixed under warrenty.
I just turned 30k on the Azera and I still love it. Not infrequently, I get complements on its styling. If I were not retired, I would be in line for a Genesis.
Ok, I’m late one this one, but in response to the first comment by GS650G, I have to say that rebuilding Acura Legends does not guarantee improvement. The British Rover group tried this, and it was not a “Stirling” achievement, if you will.
To use a phase from a not-so-popular politician, Hyundai has “stayed the course” and it has worked quite well for them.
From the article:
The new i10 is the hot new developing-world mini, having taken India by storm, capturing the I(Indian)COTY award.
Which has a lot to do with the quality, durability and affordability of the last gen Santro, which sold like hotcakes in India. They’ve paved the way for success in young Asian markets, and they are (slowly) doing the same in America.
Now that easy money and sweetheart lease deals on Detroit iron are history, I wouldn’t be surprised if HK’s market share continues upward.
very nice editorial, very informative. Tx, David
Kia still needs to overcome crushing depreciation and a poor buying experience.
Hyudia as a brand is doing much better in those areas.
“and the Kia Forte just looks…good.”
Really? I didn’t think so.
gamper: This is the company Toyota has to worry about.
+1
In fact, I have said here before… they’re going to become the new Toyota… which already is starting its decline… they are careful to not repeat GM mistakes… but in the end they will… and make their own. I think their “kingdom” will be way shorter than GM’s.
Excellent article Mr. Paul.
But I don’t like their cars.
The Hyundai Kia driving experience is still not on the par with the Japanese competition (handling and acceleration) but the vehicles sell because of the price, reliability. I get picked on all the time for driving a Spectra and here in Texas its just another “chick car” but the insurance is still lower than a cobalt, and the Hyundai Beta II engine is smother than the Ecotec GM engine at 6000 Rpm. So These guys have been the underdog and many people still refer to them as a “fisher-price” disposable car, but let the ignorance continue while the quality and value continues to improve. The South Koreans will probably have a hybrid out before the first “Volt” ever rolls of the last GM factory.
To TTAC’s best & brightest:
I have a question. Why don´t they count nissan and renault’s sales as one? after all they are in an alliance. That would clearly change hyundai’s place on the list.
What’s driving HK’s industry leading global growth?
Life is an education. Hunger is the teacher.
Prolly take us 3-4 generations to get the hunger back.
jems86: I have a question. Why don´t they count nissan and renault’s sales as one? after all they are in an alliance.
You answered your question. Sales of two companies are considered consolidated if ownership in one exceeds 50%. Renault only owns 34% of Nissan. Yes, as an alliance, they sell more, and it’s fair to see them as one of the Global Big 5. It’s all a matter of hoe you count.
I got to ride in my Wife’s Uncle’s Azera this weekend, very impressive. I’m looking forward to seeing the upcoming Genesis Coupe and the Elantra Touring.
Having dealt with most of the franchises mentioned as a franchise holder, I’ll cast a vote in the “Not So Fast” category for the Koreans.
Solid, fast-improving cars? Without a doubt. The Koreans can build a terrific vehicle…including the folks at what is now GMDAT, who may actually be the best of the bunch, IMO.
Management? Ah, here the plot thickens.
Take a look at the talent they’ve broomed in NA over the past few years….it’s to the point that recruiters won’t touch H/K. Nobody can live up to their lunatic ambitions.
Brand management? Kia is Hyundai is Kia…or is that backward?
Wait for another 18-24 months, when the luxury standalone brand launches…yes, it’s coming. With the ‘mericans banished, who’s to tell them otherwise?
If you go to the auctions, you’ll see where the ‘growth’ in ’08 numbers is coming from–daily rental. Great values, BTW.
IMO, Toyota and perhaps even a restructured Big 3 have the Koreans covered.
My recent family car was a 03 Santa Fe. With the exception of a few problems, the car was very well engineered and built. We traded it in when gas prices went up, but we miss having it. Compared to other SUV’s in it’s class, it was a steal.
Some of you know me, so bear with me if I repeat myself, but I finally walked away from Ford, then GM, then Chrysler and decided to “take a chance” on a new 2002 Hyundai Sonata V6, which was (damning it with faint praise) “better than average” (read: better than anything I’d owned but not up to par with Toyota or Subaru or Honda). HOWEVER, my dealer bent over backwards to actually find the mystery no-start issue (it ended up being a master computer having a bad internal ground which jinxed the diagnostics system). ARE YOU READING THIS, GM, FORD AND CHRYSLER?
So when we received a letter from our dealer in My 2007 stating we could lease a new Sonata for $211 a month for 2 years, nothing down,and they’d pay the first lease month, we said to ourselves – well, we’ve never leased but let’s try once.
Right now I’m sitting in a northern Canadian rockies B&B and have just driven the Sonata nearly 2700 miles in 11 days, and tomorrow, we make our way home to Michigan, some 2000 miles away. The car has been totally trouble free over the 14,000 miles we’ve put on it in 14 months, and has been totally trouble free on this vacation.
It’s a four cylinder car and we’re seeing as much as 33 mpg on the highway at speeds up to 70 mph. It does 0-60 in under 9 seconds, seats 5 in comfort, has a very good ride, handles well, is quiet enough (I do miss the Alfa like howl of the 2.7 V6 we had previously), and is invisible enough to keep thieves at bay in high theft areas. It also can do something that virtually no competitor can “officially” do, and that is, tow 1500 pounds legally. Toyota Camry = 1000 pound tow rating, for one major competitive example. Yep, we tow our 2007 Clipper pop-up (1440 pounds) with the Sonata (but didn’t on this trip – didn’t want grizzly bears to go “ooooh, yummy, another zip-lock dinner of two tourists!”)
The Sonata is actually rated as a full-sized car, and I jokingly tell friends that it is the perfect “Family” car because it has a 5-body trunk . . .
It’s also MANUFACTURED in Alabama USA, and in fact I was privileged with the opportunity to see cars being built for the first time in my life, at their highly advanced (and how!) plant – ironic since I’m Michigan born and bred and could NOT get into any car plants so drove 2300 miles round trip in January to Alabama. Hey, it WAS 63 degrees when we left the plant (and had to head north back to winter and work).
Now all they have to do is work on their dealerships.
I went to a Hyundai dealership in South Florida on Saturday with a friend to get the oil changed in her car. She had an appointment. When we get there, they ask about her last name and that she would have to bring her divorce papers in to prove she was the original owner “incase the transmission blows up or something” (his words!) and the warrantee was needed. Mind you, there was nothing wrong with the car, it just needed an oil change.
We sit down in the deserted waiting room and sit there for 50 minutes. Getting annoyed we get up and walk over to the service advisor who we find smoking outside and talking on his cell phone. He asked if we would like the car washed. We said sure and then go sit down. Twenty minutes later we walk over again and as we are standing there he tells another guy who is walking by to find out what is going on with the car. The guy says no, he is busy. Two minutes later that guy walks by again with a trash can. Taking the trash out was more important than checking on a customer’s car. AWESOME. Finally after 75 minutes the car is ready to go.
As I walked out, I was thinking about a Forty Thousand Dollar Genesis customer being treated the same way that they still have a long way to go.
My uncle bought the first-gen Acura Legend (hey, Acura, remember when your cars had great names? no, you probably don’t…). Anyway, his current ride is an 07 Sonata. There’s a lesson in here somewhere.
Let`s see what do these two successful Companies- Toyota and hyundai have in common.
1. Continuous improvement of quality ,fit and finish and materials comparatively to competition ( not just to their own models prev generations!)
2. Short model overhaul cycles.
3. Increasing model diversity and body styles. Every model is being replaced at least by one.
4. No rebadge strategy adopted.
5. No foreign platform or engine strategy.
6. And strangely enough- no price decrease strategy, even with contracting US middle class consumer.
detroit? Any comments..?
I’ve been contemplating the purchase of a compact or mid-size sedan for a few months now. It will be taking the place of my beloved Mazda3 s 5-door, mainly because I need an automatic to cope with hours of gridlock every day. A little more comfort doesn’t sound too bad either, as I’m hitting my mid-30’s…the Mazda can be a bit jarring on imperfect road surfaces.
I’ve driven the Hyundai Sonata in both 4- and 6-cylinder versions and the Kia Optima 4-cylinder. I was impressed by all of them, far beyond any expectations I had beforehand. They are impressive cars even at full MSRP, but knowing I can snag one for a lot less sweetens the deal even more!
Each year, the Korean brands are gaining more respect…both from consumers and the automotive press. It may not be too far down the road that 100k powertrain warranties and undercutting prices by $3000 or more won’t be necessary to help sell them!
James2 :
July 30th, 2008 at 1:34 am
My uncle bought the first-gen Acura Legend (hey, Acura, remember when your cars had great names? no, you probably don’t…). Anyway, his current ride is an 07 Sonata. There’s a lesson in here somewhere.
Interesting point that you make! I never thought I’d say this, but I detest the interior AND exterior styling of the ’08 Accord so much that I’d choose a new Sonata instead….much better looking car!
On a separate note, I completely forgot that Acura used to have actual names rather than generic alpha-numeric nomenclature! =) Integra, Legend, Vigor….the good ole days!
Huyndai, Kia are not new thorns in the domestics side. It started for me as a GM dealer investor 10 years ago.
The idea was to sell your used chevys to a secondary market like college students and kids getting their first jobs etc. Well we had the cavalier a notoriously bad small car. There was always a blown four cylinder engine lying on our shop floor. We had leaks that were un-fixable in the rag top etc. But the blow was that for the same price as one of our used pieces the customer could drive up the road and get his daughter a new huyndai/Kia (then they were competitors) for the price of one of ours three years old.
Remember, neither our car or the Koreans had great (read Japanese) quality, however the new Korean car had a warranty and ours had whatever the dealer could give (30days). It made our iron sit on the lot and the good money we put in that trade turn bad.
The idea back then was that you couldn’t make money on new cars but used was different. It sure was, anytime we got a used Toyota or Honda (even with 100,000 miles) it was gone in two days, while our domestic brands languished.
I got out, when I saw that GM products for us were not going to make a profit new or used and that was ten years ago. AS tot the bloggers that now the GM stuff is much better, my retort is so is the Korean stuff including their warranty. It’s just like the Japanese model, they get the toe in the door on price and then ratchet up the quality to the point that they can charge (retail) prices.
Yes, I felt that even 10 years ago the Koreans were more dangerous competitors than the Japanese. Worse,it’s not choose your competitor the low price guy or the quality guy, you have both battering you in the US.
What’s also giving Hyundai/KIA a giant shove forward is that they opened a huge R&D facility in Germany (Frankfurt) a few years back (2.5 years, AFAIR), and they also have R&D facilities in California, and soon India (that one may be already open).
So for decades they made cars designed in Korea, without much understanding of international tastes or conditions, and little appreciation for what made the Western car buyer tick (I was at the Frankfurt one, had a session with the top guys there). Things like better brakes, because Euro conditions are high-speed highways with lots of congestion points (high speeds plus regular hard braking), quieter interiors, less busy controls (Euros prefer discrete symbols, Asians prefer more labels), etc etc etc.
It’s only been a few years, but already the differences are telling.
LG, Samsung etc are kicking the arses of Sony, Sharp etc… never mind Philips and their western brethren.
HK will eventually kick the arses of Toyondissan.
A 10-minute test drive in a 5-Speed Elantra SE convinced me, and a $2000 rebate sealed the deal. I drove out the same day after paying cash, and have been happy (hell, almost smug, after seeing the CR rating for the car) for the last 3 months.
I did have a couple of problems, though. The cap popped of the top of the shift knob (a threaded fastener had come loose); I glued it back on. Then, an annoying rattle developed in the back of the car when at idle (I eventually traced it to the trunk spring rods – they had popped out of a plastic snap-in holder. I snapped them back in and secured them with a twist-tie). Haven’t been back to the dealer yet – I may have the first oil change dome there (If I have a few hours, as a guess.)
The engine is smooth, relatively powerful, and gets very good gas mileage (a bit short of class-leading). The A/C is a bit slow to cool, but once going, is just fine, and the satellite radio and AUX input are nice, too. The electric steering is a bit vague on-center, but changes weights nicely between city and HWY driving, the shifter (cable unit) could be better, but engages smoothly.
Sounds like a review, eh?
It’s for GM and Ford! Build a car like this, and I’ll pay the extra 2-3k for the home team!
“Hyundai sold Acura Legends in Korea re branded as their own. The cars were shipped in knocked down and built locally. No wonder that Hyundai learned how to make better cars.”
In the 1950s Austin shipped CKD cars to Japan for Nissan to assemble with the idea that Nissan would build up local content and take over production themselves.
The rumour goes that any local content had to be approved for quality by Austin before it could be used. Because of the then-recent “difficulties” with Japan the Brummies were not averse to rejecting perfectly good components out of hand.
Nissan didn’t give up, they just improved the quality again and again.
I agree that H-K has done an enormous amount of work on their designs and quality. Now they have to work on their dealerships. In my town the Hyundai dealer is in a small building squeezed between a Chevy and a Saturn dealership. Little showroom space or service area and hardly any parking. If you want to be big time you have to look big time. Having said that they get way more traffic than the nice looking but empty Saturn dealership.
After living with and driving (the wife’s) 2003 Elantra GT 5-speed for five years and 35K miles without even a single minor issue, I am completely sold. If I was in the market for a car (new or used), I’d ONLY be shopping for either a Toyota, Honda, Subaru, or Hyundai product. The mere fact that Hyundai is among those other three names should speak volumes as to how far they’ve come.
cdnsfan27 :
July 30th, 2008 at 1:48 pm
I agree that H-K has done an enormous amount of work on their designs and quality. Now they have to work on their dealerships. In my town the Hyundai dealer is in a small building squeezed between a Chevy and a Saturn dealership. Little showroom space or service area and hardly any parking. If you want to be big time you have to look big time. Having said that they get way more traffic than the nice looking but empty Saturn dealership.
You make a VERY good point! Although I hadn’t really thought about this particular aspect (dealership appearance), I’ve been saying that Hyundai and Kia both have an image problem. Now that they’re building competitive vehicles, this is the last major hurdle standing in the way of even greater success!
Hyundai has made some progress by expanding its product line and building some cars that people actually notice and want! The Elantra, especially the SE, is a lot of compact car for the money. The Sonata is an honest-to-goodness Camry and Accord competitor. Although the Azera is rather understated, after driving a Limited model I am very impressed. I’d be just as happy in an Azera as a Lexus ES 350…even though the Azera fully loaded is within $3k of the Lexus. It’s that good, IMHO. And at least two car mags compared the Veracruz head-to-head with a Lexus RX330 when it was introduced and the Veracruz held it’s own!
Kia hasn’t quite made the strides that Hyundai has, but they’ve made some significant improvements. The Optima is one example, it’s understated but handsome (so was the ’07 Accord), well-built, and a fantastic value. After test driving one, the quality of interior materials is as good or better than in my Mazda3 or most new Nissans I’ve seen. It’s unfortunate that it only got the hand-me-down 2.7L V6 last seen in the ’05 Hyundai Sonata. Kia also has the critically acclaimed, but not very well-known, Rondo SUV/crossover. Even Consumer Reports loves these two.
Now Kia is joining Hyundai in building a U.S. production facility…about an hour from where I live, actually. Another way to up the brand image and increase visibility to U.S. consumers.
But the largest Hyundai dealer on this side of town shares a tiny, ugly building with a Subaru franchise…it’s the building that used to be the Mitsubishi dealership 10 or 15 years ago…not pretty. There are a few newly-built Hyundai dealerships and at least on new Kia dealership that are very nice, but a lot more that are more Buy Here-Pay Here than Honda/Toyota in atmosphere. My limited experience at some of these less than inviting dealerships is that the salespersons match the questionable facilities and leave much to be desired!
Those snazzy HUMMER dealerships are going to be on the market any day now…and possibly SATURN not too far down the road….if I worked at Hyundai/Kia Corporate I’d be working with real estate brokers right now!
What’s driving HK’s industry leading global growth?
Lets not forget the emphasis they learned to put on good design as well as quality. For the most part current Hyundai products are noticeably better looking than their Japanese competitors, many of which have a very “forced” style to them.
Unlike the domestics, Hyundai is maintaining high levels of quality even for rentals so that their reputation is ready for their future customers. If you are going to use fleet sales to manage your overflow production, this is the way to do it.
+1
I rented a Sonata in Atlanta about 2 years ago and was favorably impressed – it was like a traditional Buick in all the good ways and few of the bad.
GS650G
“Hyundai sold Acura Legends in Korea re branded as their own. The cars were shipped in knocked down and built locally. No wonder that Hyundai learned how to make better cars.”
Plain wrong. In fact, the company was Daewoo, the year was 1994 and the car was the Arcadia. That first year they sold 3,446 units of the rebadged Legend but that would be the peak year for sales. With the onset of financial difficulties within Daewoo, the program with Honda lost momentum and eventually ended in 1999.
FYI, Hyundai got its start in the business in 1968 by assembling Ford Cortinas from knock-down kits but quickly set to work developing its own proprietary model, the Pony which premiered in 1975 at the Turin Motor Show. Following the launch of the Pony, Hyundai continued to invest heavily into R&D to maintain its own technology independence and has never looked back.
Plain wrong. In fact, the company was Daewoo, the year was 1994 and the car was the Arcadia. That first year they sold 3,446 units of the rebadged Legend but that would be the peak year for sales. With the onset of financial difficulties within Daewoo, the program with Honda lost momentum and eventually ended in 1999.
Ah yes, Daewoo…or, since 10/17/02- GM Daewoo The lone Korean automaker that still lives down to the expectations of Korean quality circa 1989! It’s rather intriguing that Hyundai and Kia have made such progress in their long, uphill battles for credibility. Yet Daewoo, even with or perhaps as a result of their marriage with GM, can’t even approach the refinement and quality of what Hyundai was turning out five or six years ago…
Instead, they build abysmal tin boxes that can’t get out of their own way like the Suzuki Forenza and Reno and Chevrolet Aveo. And we can’t forget the awful Suzuki Verona mid-size (a rebadged Daewoo Leganza with a nose job) which earned the lowest score possible in the 40mph offset frontal impact crash test. The roof buckled, windshield shattered and front seat occupants were mangled! Then again, it’s only engine was a 156hp V6, so even maintaining 40mph would require a heavy foot.
GM nows owns 50.9% of the entity known as GM Daewoo, Suzuki owns 11.2%, SAIC (Shanghai Automotive Industry Corporation) owns 9.9% with the remaining percentage owned by Daewoo Motors Creditors Committee (if you recall, Daewoo went belly-up and filed bankruptcy in 2001).
I can’t finish my rant about Daewoo without talking briefly about poor little Suzuki. By selling rebadged Daewoos as their own in the U.S., they’ve completely bastardized their brand. While they were pushing Daewoo-built Renos and Forenzas, the quirky/wonky Suzuki-engineered and Japanese-built Aerio was all but invisible on their lots. It was one of the best cars that nobody bought that I can recall.
Now, they have the SX4 Sport (sedan) and Crossover (AWD 5-door) that are damn good little cars able to hold their own against most competitors…especially when pricing and equipment levels are taken into account. Yet they still have those horrid Daewoos littering their dealerships. And they have a 10yr/100k warranty to honor on those things….I’m imagining that their expectation is that no one could tolerate a Reno or Forenza for the duration of the warranty and the 100k coverage is for the original owner only….Suzuki brand image is probably a notch under Kia at this point….but if I actually decided to buy a new SX4, that definitely works in my favor…
Like I have said previously Hyundai is a lot like Samsung in electronics, they are a behemoth that makes everything from cell-phones to refrigirators and sells it everywhere, from Alaska to Patagonia.
All their (Samsung) products are performance and design-wise at least competitive and in some cases they are the world leader and their pricing reflects that. For instance in LCD televisions, they are a world leader in design. Japanese actually copy their design elements. Technologically their lcd TVs are better than all Japanese TVs except the top Sony models which still have a slight edge but who knows for how long. And their prices for lcds reflect that, in general they are more expensive than competitive TVs including Sony. However unlike Sony they are flexible in their pricing and if they need to they will lower their price to undercut competition on as needed basis.
I expect Hyundai to be in the position of Samsung vis-a-vis Sony (Toyota) within the next 10-15 years.
Other proof that Hyundai gets it: They’ve been pretty consistent about keeping car names, choosing to improve their internal brands instead of cutting them off completely (i.e. GM).
The Sonata name dates back to 1988 (introduced in the U.S. as an ’89 model), the Elantra dating back to its 1991 debut. The Excel line itself improved tremendously from its dreadful 1985 debut, with the Accent taking its slot since 1995. Given that the new Genesis coupe is a vastly different car than the outgoing Hyundai Tiburon (est. 1996), I’ll take HK’s word for it that it isn’t a true replacement.
Hyundai’s XG350/Azera, Santa Fe, Genesis, Entourage, et al. are all relatively recent segment pursuits and don’t really count. I’ll extend the same pass to the Kia brand, as it was once a competitor–though you can see the same “don’t lose it, improve it” mentality with the Optima sedan and Sportage crossover.
It’s a crying shame that Daewoo isn’t around to enjoy this. I’ve always liked how their car names (Leganza, Nubira) sounded reminiscent of deadly African viruses.
No really.