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Hyundai is awesome. They are undoubtedly a threat because their products are cheap, and the quality is improving
Honda CEO Takanobu Ito in the Canadian Press. “Hyundai is the biggest threat for the Japanese automakers,” adds Nissan senior VP Shiro Nakamura. “We have to offer the equivalents of sushi, tempura and kaiseki to compete against Korean barbecue.” Now imagine the reaction these quotes would have received ten years ago.
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Honda let Hyundai import Acuras into Korea as knockdowns back in the 90’s and sell them rebadged. This probably educated Hyundai in how to build better cars.
In hindsight this was a mistake. Since Japanese cars were hated in Korea they felt this was a way around the animosity felt towards Japan.
The scene is roughly the same one we had in the 80’s when Japanese cars were cheap, high quality, and in demand. Who would have thought it could happen again.
Interesting and odd quote from the Nissan VP. Nothing against Sushi, but I’ll take Korean BBQ and kimchi over Sushi and Tempura anyday (from a purely culinary point of view).
The Japanese slowly lost their way chasing US marketshare, offering larger and larger cars, giving up the small car high mileage fun to drive street cred they had, all the while also dumbing down their products with cheaper and cheaper components. Meanwhile, Hyundai was doing the opposite. Compare the interior quality of a 2009 Civic vs a 2009 Elantra.
I don’t know that the rise of Hyundai was really a surprise to anyone (outside the Tubes anyway).
They were doing the right thing for the last 10 years – tends to get results.
Acknowledge your shortcomings, then fix them.
If only GM could ever learn that lesson…
Driving a Hyundai, rightly or wrongly, still has negative connotations.
I see Hyundai risking quite a bit now as they have raised the prices of their cars to near Toyota/Nissan/Honda levels.
Also, Hyundai, new, from the vantage of resale value, makes no comparative sense relative to Honda or Toyota.
We’ll see if they can carry their momentum forward while pricing their offerings closer and closer to the Japanese counterparts.
I for one don’t think they’ll grow as fast.
If Hyundai would offer a clone of the small Japanese pickups that everyone else stopped offering here years ago, they’d corner that market immediately. I still see those small pickups zipping around in these parts all the time, and while they’re apparently going strong, they aren’t getting any younger. I want one, but I want a lightly used one. That’s not going to happen until someone starts selling them again.
What I really want is a street-legal Kei truck. Is that so wrong?
Also, Hyundai, new, from the vantage of resale value, makes no comparative sense relative to Honda or Toyota.
True, but what difference does that make to the Great Recession buyer who is looking for the best decade plus bet on a value-oriented new car.
Strippo:
Regardless of what people say when buying a car, few hang on to one for 10 years or longer after buying it.
I have no doubt that this number rises, however, as you say, when economic times are bad, much less terrible and looking more terrible going forward, as now.
@ GS650G
You are completely wrong.
Hyundai has never had any ties with Honda. And the one you are talking about is actually Daewoo. Before Daewoo swallowed up Ssangyong for its Mercedez Benz derived executive luxury sedan Chairman, Daewoo built Acura Legend(the 2nd gen.) as Daewoo’s top of the line Arcadia model.
Also, Japanese cars are not hated by Koreans. Lexus is always no. 1 or no. 2 import brand in Korea. When it’s about Japanese products, that animosity toward Japan that you wrote, somehow, doesn’t exist in most cases.
ohsnapback –
Resale value has a lot of variables, miles put on per year, years kept, how well it is upkept, etc. For someone who drives far more than the average miles per year, or who keeps their vehicles for longer than four or five years, the differences in trade value diminish considerably.
Also, from my experience, resale value is hardly ever a consideration in a customer’s mind. Most people care about the payment they are going to get and the amount of money they have to put down to get it, and that is about it.
Hyundai’s are improving,..”quality is improving”
But they ain’t no Toyota or Honda for that matter. They ain’t no GM or Ford either.
At auctions in my area there are always Hyundai’s (2002-2005+) that have 60,000 miles or more with serious mechanical problems. Mostly engine, tranny, suspension.
Also my friends have a 03 Tiburon and 02 Sonata which are loaded with suspension and hardware issues.
Regardless of what people say when buying a car, few hang on to one for 10 years or longer after buying it.
It doesn’t matter what people actually do. What matters is what they have a mind to do. This is why people still prefer 30 year fixed mortgages to the 5/1 ARMs that statistically make more sense.
i like Hyundai, i’d sooner buy one than a Toyota
Strippo
is this the KEI truck you’re looking for?
http://www.consumerreports.org/cro/money/shopping/ways-to-save-on/save-on-wheels-new-or-used/reliability-snapshot/save-on-wheels-new-or-used-reliability-snapshot.htm
As for Hyundai we need to see where that green line goes going forward.
“Driving a Hyundai, rightly or wrongly, still has negative connotations.”
That only matters to people who buy a car for its perceived status value. Besides, in my eyes, the Hyundai buyer is someone who demands maximum value for their money. Nothing negative about that.
“I see Hyundai risking quite a bit now as they have raised the prices of their cars to near Toyota/Nissan/Honda levels.
Also, Hyundai, new, from the vantage of resale value, makes no comparative sense relative to Honda or Toyota.”
Comparably equipped, Hyundai actual new vehicles transaction prices at least 10% below those from Honda or Toyota.
Resale value only matters to frequent traders. For people who buy a new car and run it ten years or more, resale is a non-issue.
That only matters to people who buy a car for its perceived status value
There was a time when Hyundai signaled to friends, family, customers and most importantly potential mates, that you were poor and had bad credit. Those days are pretty much over.
That being said if I were Hyundai or the Korean government I’d up the brand building advertising. They still need to build the brand – there is still some reluctance among the general population.
It may sound strange to the commentariat, but I would rather buy a Ford than Hyundai. I think the only decent car they made was Santa Fe.
Those are all fair points made about Hyundai in response to my earlier comments.
Having said that, my personal experiences with Hyundai, and recent ones at that, is they’re still an ‘also ran’ to their competitors.
I’d take a Fusion, Camry, Accord or even the new Malibu over the suspension ‘o rattle-matic Sonata any day of the week.
For all the progress Hyundai has made, they’ve gotten bad press (rightfully so) for basic suspension issues on the Sonata, Veracruz and Tuscon (from Canadian Driver, Consumer Reports, etc.).
Not quite there yet, in terms of suspension, but they’re getting there. Every new generation of Hyundai I’ve driven gets better and better in this regard… except the Veracruz… the older Santa Fe is a much better car, suspension-wise.
–
In terms of engines… not quite there yet, either… when compared to Toyota or Honda. But then… in terms of gasoline four-bangers… hardly anyone is, anyway. Hyundai diesels, on the other hand, are a match for most anything out there.
Nothing against Sushi, but I’ll take Korean BBQ and kimchi over Sushi and Tempura anyday
Hah! I swing both ways. Some days, I’m in the mood for a sushi and tempura fix. On those days I’m not so big on portions. But when I’m hungry and in the mood for some nice marinated ribs hot off the grill, it’s Korean BBQ all the way. $10 all you can eat in LA!
I’d take a Fusion, Camry, Accord or even the new Malibu over the suspension ‘o rattle-matic Sonata any day of the week.
You should try test-driving one of the newer Sonatas. Engine’s super quiet.
Their 2.0, 2.4 GEMA engine share with mitsubishi, chrysler.
And, Their high end 4.6L Tau engine listed as 2009 world 10 Best Engines.(by wards auto)
http://wardsauto.com/reports/2009/tenbest/best_engines_2009_081205/
In 2003, According to Consumer Reports, Hyundai’s reliability rankings tied Hondas.
http://www.usatoday.com/money/autos/2003-03-11-cr-picks_x.htm
Hyundai’s reliability rankings already tied with Hondas 6 years ago.
In 2006, JD Power and associates quality ranking, overall the Hyundai brand ranked 3rd, just behind Porsche and Lexus, and beating long time rival Toyota.
http://www.usatoday.com/money/autos/2006-06-07-iqs_x.htm
Their quality, reliability are improving.
———————-
IntelliChoice, which tracks automotive ownership data, has chosen Hyundai’s Sonata sedan as one of its “2009 Best Overall Values of the Year.”
http://www.intellichoice.com/best_values/bovy/year/2009/bovy_category/Large
Hyundai was also ranked ‘third’ as having America’s best certified pre-owned program.
http://www.forbes.com/2008/10/22/best-CPO-cars-forbeslife-cx_jm_1022cars.html
Their resale value are improving.
I’m impressed with the tremendous progress that Hyundai has a made in the last decade, and thought their quality was getting to be on par with Toyonda, etc..,
Then last week, the auto trans on my friend’s Elantra (2003, 64K mi) failed. Luckily, she was the original owner, had the 10yr/100K warranty protection, and Hyundai just picked up the $2300 tab for transmition repairs. She had to make a few angry calls (just a few) to Hyundai, but they did honor their warranty claims.
Good to know that they honor their 10/100 warranty (for original owners), but now I beleive all the stories about 5-6 year old, 50-70K mi Hyundais crapping out are for real…and would make me hesitant to consider a new or used one.
Hope the Genesis proves more durable, or else Hyundai really will be the next Toyota (i.e., “in trouble”.) If their 5 year old vehicle quality continues to suck, they are gonna slide back to the bottom rungs pretty quickly.
So, this means that Chrysler uses awesome Hyundai engines? Tsk tsk.
And suspension issue,
1. In America, Hyundai Motor America (HMA) change suspension and handling to US market.
2. Sonata and Santa Fe are ‘made in usa’ cars. And maybe US version santa fe and sonata use US made component.
If you don’t like suspension and handling, it mean american engineer and american made suspension parts are bad.
In 2009, Hyundai/Kia vehicles were named as “least expensive vehicles to insure”. Hyundai/Kia vehicles were the least expensive to insure and occupied the ‘top five’ least expensive slots, said Insure.com.
http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090603-The-Most-Expensive-Cars-to-Insure/
In 2009, 6 models of Hyundai/Kia cars earned Top Safety Award by IIHS, better than Nissan/Infiniti.
http://www.iihs.org/ratings/default.aspx
Resale value??? Look at the resale value of a GM or Chrysler product these days – make Hyundai’s look like a pretty good investment.
It is all comparative to the cost per mile, not the final recovery price. If you bought a Hyundai for $8000 less than a comparably equipped Toyota, but its final resale value 5 years later is $5000 less – all other things being equal, you come out $3000 ahead. In my books anyways.
Korea has cheaper electricity than Japan, as Japan went almost entirely nuclear. Electricity is a large part of the total cost of a car. Korea will be the low cost producer for the foreseeable future. Korea has a massive supply of well educated engineers. Therefore, Japan Inc is in trouble, and they know it. Any product Japan can engineer, Korea can copy or improve upon. Japan is now seeing what they did to the US, happen to them. Life is a bitch.
The resale issue of Hyundai while a valid point vs. Toyota and Honda is only valid for the first five years more so in the first three. After five years resale value is primarily determined by mileage and condition for any vehicle.
Hyundai/Kia have come a long way, from vehicles I would not have considered several years ago to vehicles I would buy today. According to the Consumer Report’s link their longterm reliability is middle of the pack and I’m pretty sure the more recent/current models are even better than that.
A good example is the new Kia Forte, IMO the styling and features surpass the Civic/Corolla and the fact that the price is less is an added bonus.
The September sales figures indicate many recent car buyers see the value in Hyundai/Kia vehicles and like the vehicles themselves. I tend to doubt price is the only reason driving their sales.
They have without question become a formidable competitor in highly competitive market segments and I think will continue to gain marketshare in the US market.
You may not have been around in the early to mid-70s.
Toyota and Datsun/Nissan had zero status. Drivers were teased as slightly off-mainstream. Japanese cars were priced far cheaper than American cars. There was certainly no quality premium.
Over time something became obvious. The Japanese cars had better quality at lower prices than the competition. Over the years that quality was reflected in higher original and higher reselling prices.
Perceptions of quality and resale pricing of Japanese cars did not spring out of thin air. It took a decade or two for their reputation to become something more than “made in Japan,” an obsolete phrase popularly used to refer to low quality items.
And Hyundai today is exactly where the Japanese were then. Especially Hyundai of the last 5 years.
That 10 year warranty has gone a long way to soothe people’s original concern about quality.
In the meantime, Chrysler and GM a have been talking about quality for the last few decades. It’s much easier to talk about quality than to deliver it. And why should they deliver it? They don’t need to deliver expensive quality; they don’t even need to sell car; they don’t need to sell cars, since they exist directly on free money taken by force from unwilling (majority was well against it) taxpayers.
As for Hyundai we need to see where that green line goes going forward. -jmo
Consumer Reports’ historical reliability information is largely irrelevant. Recent Toyotas, Hondas and Nissans are much less reliable. CR no longer recommends Toyotas without supporting model specific data and rates the Ford Fusion more reliable than the Camry. Customer satisfaction scores are plummeting.
Years of value engineering, decontenting, TSBs and recalls do well deserved, evil things to an automaker’s reputation for quality and integrity. Ask GM how it worked out for them! Hyundai’s year over year 26% sales growth while others flounder reflects widespread belief Japanese Big-3 purchase premiums cannot be rationalized.
To what extent are those sales figures buffed by fleet sales as for GM/ChryCo/Ford in years past?
They are gaining ground but all the negative comments above are valid as are the positive ones.
The rental darling issues that now plague the American companies will come back around for the Koreans however.
Hyundais are not bulletproof cars at all. Search the hyundai forums for many, many Elantras with transmission and electrical issues. The first owner is not affected due to the 10/100 warranty, but a second owner is pretty much screwed.
Like somone else already mentioned, I also see many low-mileage Hyundais at the auctions with major issues. Never on Hondas or Toyotas.
These are still cheap cars.
And suspension issue,
1. In America, Hyundai Motor America (HMA) change suspension and handling to US market.
2. Sonata and Santa Fe are ‘made in usa’ cars. And maybe US version santa fe and sonata use US made component.
If you don’t like suspension and handling, it mean american engineer and american made suspension parts are bad.
Ah yes, the old-reliable blame-Americans argument.
Never mind that Honda, Toyota, Nissan, Mercedes Benz, BMW, Ford, GM, etc all build cars in America with no suspension or handling problems.
Dear Mr. Ito,
As a former repeat Honda owner who now drives a Hyundai, I suggest that you take care not to choke on that sushi.
People like barbecue, and in an economic depression they are not likely to be impressed by hoidy-toidy attitude. With the world economy turning upside down and Hyundai rapidly emerging as the new “people’s car”, you should be afraid, Mr. Ito. Very afraid.
As for Hyundai quality “improving”, you are several years out of date with that statement. I chose my 2008 Santa Fe because it is superior to any current Honda product. It is more robustly constructed and better-finished, as any side-by-side comparison will reveal. And so far, after two winters and thousands of kilometers of towing a camper, it has proven utterly reliable. Meanwhile, there are countless Hondas sitting on hoists waiting for transmission repairs as we speak. As far as I’m concerned, Mr. Ito, is Honda that needs to improve its quality up to Hyundai standards.
Nissan’s dependability below than industry average.
3 years data.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2007130
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008115
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?id=2009043
@Chicago Dude
“Never mind that Honda, Toyota, Nissan, Mercedes Benz, BMW, Ford, GM, etc all build cars in America with no suspension or handling problems.”
@highrpm
“Never on Hondas or Toyotas.”
——————————–
LOL. Toyota/Honda/Japanese makers are bulletproof cars?
OK. I will show you evidence.
Death and devastation…Iraq troop reduction…Big Toyota recall…
http://www.kxmc.com/News/445159.asp
Toyota recall and distracted drivers
http://www.examiner.com/x-4026-Minneapolis-Autos-Examiner~y2009m10d1-Toyota-recall-and-distracted-drivers
Toyota: 3.8 million cars with risky floor mats
http://money.cnn.com/2009/09/29/news/companies/toyota_lexus_floor_mats/?postversion=2009093007
Some air bags spontaneously deploy; Honda blames drivers
9NEWS.com – Aug 30, 2009
http://www.9news.com/news/article.aspx?storyid=122340&catid=339
Toyota recalls Scions, Corollas
http://www.wqow.com/Global/story.asp?S=11007839
Toyota Recalls 95700 Small Cars
New York Times – Christopher Jensen – Aug 28, 2009
http://wheels.blogs.nytimes.com/2009/08/28/toyota-recalls-95700-small-cars/
Toyota Dealers Will Inspect Floormats Following Fatal Accident
http://blogs.cars.com/kickingtires/2009/09/toyota-dealers-will-inspect-floormats-following-fatal-accident.html
Mitsubishi Endeavor Recall for 2010 Vehicles Over Defective Airbags
AboutLawsuits.com – 12 hours ago
http://www.aboutlawsuits.com/mitsubishi-endeavor-recall-defective-airbags-6062/
Toyota Steering Defect Lawsuits Consolidated in California
http://www.aboutlawsuits.com/toyota-steering-defect-lawsuits-in-california-5932/
Mitsubishi Endeavor Recall for 2010 Vehicles Over Defective Airbags
AboutLawsuits.com – Sep 23, 2009
http://www.aboutlawsuits.com/mitsubishi-endeavor-recall-defective-airbags-6062/
Honda China JV recalls 9,464 Accords over airbag defects
http://www.theautochannel.com/news/2009/09/29/479420.html
Runaway Toyota Recall
In its biggest recall ever, carmaker warns that floor mat could jam accelerator.
http://www.forbes.com/2009/09/29/automobiles-toyota-reca
spx?storyid=67914&provider=top
Valley dealership deals with Toyota recall
http://www.valleycentral.com/news/story.aspx?id=357697
Toyota recall has Solano
http://www.thereporter.com/ci_13469396?source=most_viewed
Fatal Accidents Prompt Massive Toyota Recall
http://english.ntdtv.com/ntdtv_en/ns_bus/2009-10-02/319586124937.html
Local family’s tragedy leads to Toyota recall
http://www.timesheraldonline.com/ci_13469362?source=most_emailed
2001 Honda Accord, Civic recalled due to airbags that are even more explosive than normal
http://www.autoblog.com/2009/07/21/2001-honda-accord-and-civic-recalled-due-to-airbags-that-are-eve/
Nissan recalling 26,000+ 2009-2010 Altima and Maxima sedans over faulty struts
http://www.autoblog.com/2009/09/22/nissan-recalling-26-000-2009-2010-altima-and-maxima-sedans-over/
Carsumer Advocacy? Nissan refuses to replace GT-R owner’s busted transmission
http://www.autoblog.com/2008/10/13/carsumer-advocacy-nissan-refuses-to-replace-gt-r-owners-busted/
Toyota’s totally bizarre recall
Why would Toyota issue a recall designed to make vehicles less safe?
http://money.cnn.com/2006/07/11/autos/bad_recall/index.htm
REPORT: Nissan GT-R class action suit over transmission failures settled
http://www.autoblog.com/2009/09/20/report-nissan-gt-r-class-action-suit-over-transmission-failures/
Nissan Recalls 26000 Altimas and Maximas
New York Times – Christopher Jensen – Sep 18, 2009
http://wheels.blogs.nytimes.com/2009/09/18/nissan-recalls-26000-altimas-and-maximas/
Toyota Orders Inspection Of Lexus Floormats After Tragic Crash Kills Family Of Four
http://www.attorneyatlaw.com/2009/09/toyota-orders-inspection-of-all-lexus-floor-mats-after-fatal-accident/
Toyota Steering Defect Lawsuits Consolidated in California
http://www.aboutlawsuits.com/toyota-steering-defect-lawsuits-in-california-5932/
RAV4 Owners Fume Over Toyota’s Handling of Transmission Glitch
http://wheels.blogs.nytimes.com/2009/08/26/toyotas-reaction-to-transmission-woes-draws-customers-ire/
Toyota’s Recalls Put Reputation at Risk
Source:Chinadaily
http://english.rednet.cn/c/2009/08/25/1814084.htm
NHTSA investigating Honda over airbag recall
http://abclocal.go.com/wls/story?section=news/consumer&id=6997875
Reports of Toyota RAV4 gearbox woes mount as owner anger grows
http://www.autoblog.com/2009/08/28/reports-of-toyota-rav4-gearbox-woes-mount-as-owner-anger-grows/
Im not surprised, in the last five years no one has had as many recalls a s Toyota.
over a half a million just in 07!
Which Automaker Has Had the Most Recalled 2007 Models? You Might be Surprised
http://www.thetorquereport.com/2007/08/which_automaker_has_had_the_mo.html
Ex-Toyota Lawyer Accuses Automaker of Destroying Rollover Evidence
According to CBS News, an ex-lawyer for Toyota of North America has filed a racketeering suit against his former employer. ToMoCo’s former managing counsel Dimitrios P. Biller accused the automaker of illegally withholding evidence in hundreds of rollover death and injury cases, in a “ruthless conspiracy” to suborn evidence of its vehicles “structural shortcomings.
http://www.cbsnews.com/stories/2009/08/29/cbsnews_investigates/main5273636.shtml
Yeah… hmm… the world is changing. It would seem.
Hyundai/Kia mean business.
Is it true that Hyundai also controls major shipping routes? Or is that a different Hyundai?
This is nothing new, 4-5 years ago, the then CEO of Toyota (he got at least one thing right regarding the automotive future) stated that Hyundai was the biggest threat to Toyota.
@ohsnapback – Resale value is largely a reflection of discount from MSRP.
Most Hyundai/Kia models are still sold w/ significant discounts under MSRP and thus have lower resale values than Hondas and Toyotas (tho, Hyundai/Kia have seen some of the largest increases in resale value over the past 5 yrs).
Hyundai, otoh, hasn’t offered any special discounts for the Genesis sedan and its resale value reflects that w/ its 3 yr resale value being on par w/ the Lexus GS and significantly higher than the Infiniti M.
W/ the next gen Hyundai/Kia models, I would suspect that discounting by Hyundai/Kia would not be as deep – resulting in higher resale value (the downside being having to pay more upfront at time of purchase).
As for the average time of ownership, people nowadays hang on to their autos for about 8 years.
@GS650G
Aside from the error about Hyundai building rebadged Acuras, not only has Lexus been near the top in import sales in Korea, Honda, for the past couple of years, has led the way in import sales.
@rockit – Hondas are known to have suspension issues.
@zaitcev – that was DaimlerChrysler, and the GEMA engine (Hyundai supplied the basic engine block) is also used in the Mitsu Evo (btw, Mercedes approached Hyundai regarding jointly developing small engines).
As for reliablity, Hyundai places in the top 1/4 for not only JD Power and Consumer Reports, AutoBild, which probably does the most comprehensive analysis of reliability in the industry, placed Hyundai in its top 5.
I’ll take Korean BBQ and kimchi over Sushi and Tempura anyday (from a purely culinary point of view).
But have you ever had kaiseki? It’s the Japanese equivalent of fine dining, with lots of tiny dishes.
Hyundais are not bulletproof cars at all. Search the hyundai forums for many, many Elantras with transmission and electrical issues.
Hondas are not bulletproof cars at all. Search the Honda and Acura forums for many, many Accords, Odysseys, and TLs with transmission and electrical issues.
Just sayin’. Its not that there’s a problem, its how they respond to it.
My Trooper’s transmission failed at 60k. Isuzu replaced under warranty no questions asked. 90k later its still going strong.
I appreciate that. It is my understanding automobiles are complex machinery things. Stuff happens.
I seem to have hit a nerve with v7rmp7li. I should say that I have no problems with Hyundai and am just as likely to buy one as I am to buy a Honda or Ford. Hertz has given me many Sonatas over the last 2 years and they are perfectly fine transportation appliances. I think I would pick a Sonata over a Camry.
Nope, my only beef is blaming Americans for suspension problems. Trust me, it’s not our fault.
@HEATHROI “is this the KEI truck you’re looking for?”
Heh. It is now.
Toyoya starting to slip now. Hyundai on rise even though the product is suspect at best. Honda poised to jump but lacks in lineup. Accord a powerhouse but everything else (save Civic) is mediocre. Can Ford and GM take advantage?
Anyone who doubts Hyudai/Kia’s market viability simply isn’t tuned in to reality. As each succeeding model continues to be virtually on par with the Japanese competition with continually improved and accepted styling and increased reliability their market share increases.
You can’t dismiss their market dominating Sept. performance as merely a fluke. The car buying public without question is buying their product. Nor can you ignore the Genesis being named car of the year.
IMO they will do very well with the new Sonata too. Some of their most recent entries like the Kia Forte and Soul are selling presently without rebates. In my mind they have proven they know how to compete and are doing so in the market’s most competitive segments. I think in another five or so years they will have comparable volume to the Japanese big three if they are able to expand their dealer network which with the closure of so many domestic dealers I believe is a given. They are already at the point that both Japanese and domestic automakers know they are a force to be reckoned with.
Hyundai and Kia are doing very well because during this midst of this recession value is a great selling point. Their cars have certainly improved from what they were just a few years ago, and the styling has gone from ‘I can live with it at the selling price’ to fully mainstream acceptable. There is far less of a negative stigma associated with owning a Hyundai than there was a few years ago, although from people I have talked with Kia still suffers in that regard.
Even with the huge year over year gains, however, Hyundai and Kia combined still sold less than half as many cars as Ford or Toyota, and less than a third as many as GM. The first huge jumps are the easiest to make, the incremental gains to inch up to parity with Honda, Ford, Toyota, or GM in true sales are going to take decades and lot more hard work on behalf of the Koreans.
The true test is going to come in another three or four years when it comes time for a majority of these new Hyundai owners to start looking for a new car. By then the economy will be back in full swing, and based on how well their first Korean car has treated them they may decide to go back for a second dip, or they may toss the Hyundai as a bad memory of a bad year and get back into a more mainstream brand.
Disagree with the chorus here.
It’s far easier to build up in this business than it is to tear down.
The Hyundai/Kia line-up is having a jump specifically because we are experiencing the worst recession in the United States in seventy years. Other than the Genesis (which is not a high volume vehicle) there’s been nothing noteworthy about Hyundai’s models over the past year.
Keep in mind, I don’t hate the company. Not at all. But sometimes Black Swans can temporarily distort the market.
Trade-in’s this week at a national used car network:
Hyundai 2000 models and up trade-in’s with 150k plus miles:
2 out of 45 = 4.4%
Toyota 2000 models and up trade-in’s with 150k plus miles:
35 out of 205 = 17%
Hyundai 2000 models and up trade-in’s with less than 100k miles:
27 out of 45 = 60%
Toyota 2000 models and up trade-in’s with less than 100k miles:
85 out of 205 = 41%
Hyundai never breaks the 10% barrier with vehicles over 150k while Toyota is routinely at the 15% to 20% level. Hyundai’s list of vehicles with problems (engine/transmission needs service) is also usually more than twice as much as Toyota.
When you incorporate all their vehicles (not just pre-2000) you usually end up with Toyota at around 30% and Hyundai at 6%.
However I will give Hyundai credit with one thing. Even their vehicles beat VW and Audi on a routine basis when you measure them by this yardstick.
I agree with Steven Lang, and highrpm:
Hyundais are not bulletproof cars at all. Search the hyundai forums for many, many Elantras with transmission and electrical issues. The first owner is not affected due to the 10/100 warranty, but a second owner is pretty much screwed.
Like somone else already mentioned, I also see many low-mileage Hyundais at the auctions with major issues. Never on Hondas or Toyotas.
These are still cheap cars.
Value isn’t cheap cars that fall apart. So stop saying Hyundai is “value for the money” when they clearly are not.
“Dear Mr. Ito,
As a former repeat Honda owner who now drives a Hyundai, I suggest that you take care not to choke on that sushi.”
Golly, you sure told that bloke!!!!
Hope the Ito unit reads your post.
Assuredly the vehicle manufacturers have low-paid lackeys that surf the Web reading a multitude of message boards OR have software seeking certain words and terms for auto-retrieval (is that punnish?) for corporate droid humans to peruse and forward that believed to be of interest to their higher-ups.
The reason Toyonda is afraid is not because of the cars Kyundai is building today. It’s because they know whose playbook the company is following, and slowly but surely the strategy is working for them. They’re not building cheaper Toyotas than Toyota yet, but it’s only a matter of time.
v7rmp7li,
Do you work for Hyundai?
Ronnie,
If he does I think he deserves a raise.
@sonic_bang
You are correct on the import arrangement, but not on the emotions Koreans felt about Japanese cars in the 90’s. Furor over Tok-do, refusal to apologize for war crimes, economic issues, all combined to make owning a Japanese car in Korea a bad idea. I live there and know this much: Japanese cars were routinely vandalized, parts hard to come by, and were almost non-existent on the road.
Strippo :
October 3rd, 2009 at 9:06 pm
True, but what difference does that make to the Great Recession buyer who is looking for the best decade plus bet on a value-oriented new car.
For one thing, it’ll limit financing options. You can lease Toyotas and Hondas, and both brands do huge business from that. Hyundais don’t have the resale value to be leased.
For another thing, any savvy buyer is going to want to know his car isn’t a depreciation hole.
That’s a huge hunk of the market that Hyundai can’t chase right now. But they will if the quality remains on-track.
Good for Hyundai. Even better that Japan has acknowledged their presence. GM and Chrysler ignored them and now look – they’ve snuck in and built better Buicks.
v7rmp7li :
October 4th, 2009 at 2:26 am
If you don’t like suspension and handling, it mean american engineer and american made suspension parts are bad.
Hmmmm…then one wonders why Hyundai hasn’t found a better source. That is their responsibility, right?
FreedMike: Also, Hyundai, new, from the vantage of resale value, makes no comparative sense relative to Honda or Toyota.
Me: True, but what difference does that make to the Great Recession buyer who is looking for the best decade plus bet on a value-oriented new car.
FreedMike: For one thing, it’ll limit financing options. You can lease Toyotas and Hondas, and both brands do huge business from that. Hyundais don’t have the resale value to be leased.
For another thing, any savvy buyer is going to want to know his car isn’t a depreciation hole.
Me: True, but what difference does that make to the Great Recession buyer who is looking for the best decade plus bet on a value-oriented new car.
(See what I did there?)
Obviously, Hyundai has nailed it when it comes to building a decent car with ridiculously high equipment levels, and selling it for a low price. But when you drive one, you’ll notice thrashy engines, and suspensions tuned the easy and cheap way – soft and squishy.
It takes more bucks to engineer refined engines and suspensions. That’s where Hyundai isn’t spending their money right now.
It’ll be interesting to see if they can take their game up a notch when it ocmes to driving pleasure. That’s Honda’s territory.
Strippo :
October 4th, 2009 at 8:04 pm
Me: True, but what difference does that make to the Great Recession buyer who is looking for the best decade plus bet on a value-oriented new car.
(See what I did there?)
Well, besides acting like my nine-year-old playing the “repeat everything you say until you get mad” game, you just told me that everyone out there who’s buying a car defines value as the lowest price. That’s an incorrect assumption.
There are many people who look at long-term value and reliability as their main value criteria. Some don’t regard cars as a good value unless they’re fun to drive (which Hyundais aren’t, by and large). There are many people who, for business reasons, lease cars, and Hyundais aren’t an option for that set of buyers.
Hyundai just lanuched the brand site, http://www.HyundaiMomentum.com. Check it out.
I just testdrove a 2.0L Kia Forte 4spd auto and the engine was not any louder than my Fusion 2.3L nor was the ride quality subpar. No squishy ride and no thrashy engine. Perhaps some of the older models they still sell suffer from these maladies but that is my point, as they continue to introduce new models the vehicles continue to be completely competitive. On the lease front the Forte is currently offered at $259 sign and drive which is competitive with any other vehicle in its class.
Two more old myths shot down, thrashy engines/squishy suspensions and the inability to lease. After the older models are replaced such as the Forte replacing whatever it did (the Rio I believe)and Hyundai/Kia have a completely competitive line up watch their sales increase dramatically. Another 2-3 years and they will be major players in the markets in which they compete. Five years ago probably almost no one thought they would be where they are today, it’s clear to me they are on a roll. As I said previously, anyone that doesn’t think that’s the case is simply ignoring reality. I believe they have a fairly high owner loyalty factor as well which will only increase.
While, as a Toyota/Lexus owner (I have an ES350 like the one that crashed), I’m aware their quality has dropped over the past few years, the Toyota floor mat crash is not an indication of slipping quality. It’s the fault of the idiot dealer for putting the wrong mats in the car b/c they want the factory mats to look new so they can sell the loaner car for as much as possible. The optional winter mats for Lexus cars are extremely heavy and stiff, and could easily jam a pedal. My local Lexus dealer puts the winter mats in upside down to protect their top surface and the carpet mats in loaner cars (they actually put the left one on the right side and vice versa to make them fit). It’s quite dangerous, and I always yank the map and throw it into the back seat before driving the loaner.
I do think, however, that a simple mod to the engine computer software to cut the throttle to idle when the brake pedal is pressed would have been a smart response to the original floor mat debacle a couple of years ago.
Hyundai cars seem pretty good. I had an 07 Elantra rental a couple years ago, and was very impressed with the fit and finish and interior/exterior styling (despite the fact the exterior was a blatant Corolla rip-off). As far as Hyundais at auction in the 60k+ mile range having mechanical problems: It could just be due to the possibility that the demographic that buys Hyundais tends not to maintain or properly treat their cars.
Well, besides acting like my nine-year-old playing the “repeat everything you say until you get mad” game
I only did that because your previous response was totally unresponsive to the ten year buyer to whom I referred. Instead you talked about considerations relevant only to lessees and short-term buyers. But rather than admitting your gaffe when I tried to help you see your error, you played the ad hominem attack “game.” So we’re destined to talk past each other instead of to each other. So be it. Moving on.
PS – “you just told me that everyone out there who’s buying a car defines value as the lowest price.”
Obviously I did no such thing. My words are there for everyone to see.
v7rmp7li, there are treatments for ADHD you know.
Seriously, I’ve seen the Kia Forte. This could be bad news for Toyondissan.
The Hyundai 5 year 60,000 mile bumper to bumper warranty is a big selling point to the budget minded car buyer. http://www.hyundaiusa.com/global/warranty/warranty.aspx
As their quality improves the warranty looks less like a band-aide for poor quality and more like a company confident in the quality of their products.