Hyundai having the Last Laugh?

[Ming]

The Forbes Global 2000
Last Laugh
Joann Muller and Robyn Meredith
http://www.forbes.com

How Hyundai's carmaking prowess went from punchline to powerhouse--and is shaking up the world's auto industry.



The 2006 Hyundai Sonata made a startling entrance at the Detroit auto show in January: It descended from the ceiling. Competitors who stepped onstage for a closer look were even more stunned by what Hyundai's sleekly redesigned flagship had to offer: six airbags, electronic stability control and a long list of standard equipment, all for less than $20,000.

Hyundai has been crashing a lot of parties lately. The Korean automaker, whose shabby cars made it a laughingstock just a few years ago, wants to move into the front ranks of carmakers--which would give Detroit even more headaches. In 1998 Hyundai ranked number 12 among global manufacturers, selling 1.3 million vehicles (including those of its sister company, Kia Motors). Last year it was number 7, jumping over such makers as Renault and PSA Peugeot Citroën, with sales of just over 3.1 million vehicles.

Now it has set a grander goal: By 2010 it wants to sell 5 million vehicles globally, which would likely push it into the number five spot, now held by Volkswagen. For the moment General Motors is in first place with 9 million cars and light trucks in 2004.

Hyundai's rapid growth has been fueled by an extraordinary improvement in vehicle quality--and by targeting the once-ignored entry-level market. Last year Hyundai's cars sprang to a virtual dead heat with quality leaders Toyota and Honda in J.D. Power and Associates' annual study of initial vehicle quality. And the April Consumer Reports found the 2004 Sonata the most reliable car on the road, with just two problems per 100 vehicles.

Rivals aren't laughing anymore. In fact, Hyundai is now dictating trends that others must follow. Its success with cheap cars inspired General Motors to buy its own Korean company, Daewoo, to try to match Hyundai's offerings. Hyundai's breakthrough ten-year, 100,000-mile warranty spawned extended warranty offers by Chrysler and Mitsubishi. And the new Sonata, which goes on sale in May, raised the safety bar for midsize sedans by including stability control, a feature it will make standard on all its vehicles. A month after the Sonata's debut in Detroit GM announced it, too, would make stability control standard on all cars and trucks by 2010.

The U.S. market--largest in the world--is Hyundai's biggest target, but it's also betting heavily on Europe and on fast-growing China and India, with new plants in each region. With militant labor unions in Korea, Hyundai also plans to use India as an export base for small cars.

"It's a company we must watch out for," says Honda Chief Executive Takeo Fukui. Even Toyota, widely considered the world's best automaker, is looking over its shoulder at the Koreans. Says Toyota President Fujio Cho: "We will watch them more carefully than in the past and try not to be overwhelmed by them."

For U.S. automakers Hyundai's rise is like a rerun of a bad movie. "To some extent they are doing what the Japanese did before them, but on a faster track," says Dieter Zetsche, chief of Chrysler.

FULL Article Here: http://www.forbes.com/forbes/2005/0418/098.html

[mk1700]

Cheap cars with good quality and good design: Are hearing GM? Thats the solution for all our problems!

[Perian]

You may wish to combine this thread here:

http://forums.gminsidenews.com/showthread.php?t=12928

[VivienM]

Originally Posted by Ming

With militant labor unions in Korea, Hyundai also plans to use India as an export base for small cars.

See! Militant unions and automaker success can go together!! (If you have clueful management and a half-reasonable cost structure, anyways...)

[Ming]

Originally Posted by Perian

You may wish to combine this thread here:

http://forums.gminsidenews.com/showthread.php?t=12928

Doh - sorry 'bout that.

[vdoh182]

Ive been in a new XG 350, it looked nice, fit/finish wasnt that good and the glove box and center console needed to be shook and pushed hard to latch, but overall for the price it looked good and i think they come w/ roadside assistance free, it may not runs as long as a honda but i guess its an entry level car people want to move up from, and not hang on to for the full warranty period anyway which is proably why they've een selling better. Also you also have to consider they r increasing their prices, they rnt as cheap as they used to be.

[atomicshark]

I think this new generation of Hyundai's will almost single handedly erase the horrible cars they have built in the past from most buyers memories.

This just goes to show that although some of GM's divisions seem weak or damaged, they were never looked down upon as much as Hyundai and look how far Hyundai has come.

[AdmiralViscen]

I think the Japanese manufacturers will feel the impact of a strong Hyundai more than GM will.

[GotAWD]

2 years ago if you said hyundai, i would have thought about the Pony. But now the auto maker is making ground. GM should pay attention to these guys and not toyohondasan.

[dindak]

Their cars are getting better but I still think long term you are better off with an American or Japanese car. 5 year ould Korean cars look like 8 or 9 year old Hondas in terms of rust ect.

[GMfan2381]

Originally Posted by GotAWD

2 years ago if you said hyundai, i would have thought about the Pony. But now the auto maker is making ground. GM should pay attention to these guys and not toyohondasan.

Totally dismissing the Japanese big 3 would not be a good idea. But turning a blind eye to Korea is just foolish as well. GM needs to see what they are doing and do just that. Quality at a low price. If Hyundai can move up the quality/reputation ladder like this there is no reason GM cant do the same. Just stop cheaping out on things. ITS THAT SIMPLE.

[jokuvaan]

You can call me mickey mouse when Hyundai makes a car that has good corrosion protection.

[Perian]

Originally Posted by Ming

Doh - sorry 'bout that.

No problem!

A few of us in the office came up with an interesting question...

Who should be more afraid of Hyundai - GM or Toyota?

Our simple answer was Toyota.

We figured that the comsumer buying GM would obviously be open to American cars - Toyota buyers seem to be "Import Intenders" to start with. They may be more open to Hyundai.

The launch of the American assembled (Never say made!) will be very interesting. It should steal quite a number of sales from the Toyota Camry.

Time will tell.

[jwvrod]

I'd buy that Hyundai for a dollar, oh yeah the cars not that bad either.

[SUPERBADD75]

Originally Posted by Perian

No problem!

A few of us in the office came up with an interesting question...

Who should be more afraid of Hyundai - GM or Toyota?

Our simple answer was Toyota.

We figured that the comsumer buying GM would obviously be open to American cars - Toyota buyers seem to be "Import Intenders" to start with. They may be more open to Hyundai.

The launch of the American assembled (Never say made!) will be very interesting. It should steal quite a number of sales from the Toyota Camry.

Time will tell.

yes, but most of these "Import Intenders" are really more Japanese car buyers than just random import buyers. someone dedicated to Toyota or Honda usually isn't open to a Hyundai or Kia. both makes have become much better cars, but they're still not as highly thought of as the well established Japanese brands. besides, build quality has greatly improved, but engine technology isn't on par with the Japanese brands. even the lowest Japanese car, Mitsubishi, trumps Hyundai in the powertrain department. consequently Huyndais don't tend to match Japanese cars for horsepower, or fuel efficiency. they're a lot better cars nowadays, but they're still not beating Honda or Toyota.