Japanese automakers see Hyundai as global threat
10-02-09, 06:18 AM
#1
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Japanese automakers see Hyundai as global threat
http://finance.yahoo.com/news/Japane....html?x=0&.v=1
TOKYO (AP) -- Hyundai Motor Co. -- not the up-and-coming Chinese, nor the leaner meaner Americans -- is the automaker that has the Japanese seriously worried.
Talk to any Japanese auto executive, and the official is likely to say the South Korean automaker is rapidly emerging as the most feared competitor to Japan's world-leading car companies.
"Hyundai is awesome," said Honda Motor Co. Chief Executive Takanobu Ito in an interview with The Associated Press this week. "They are undoubtedly a threat because their products are cheap, and the quality is improving."
Nissan Motor Co. Senior Vice President Shiro Nakamura agreed. He compared the rise of Hyundai to Samsung Electronics Co. of South Korea, which has grown to rival Japan's Sony Corp., and said its cars were riding on their reputation for quality and affordability.
It may take another decade for China's automakers to start seriously competing with Nissan, but Hyundai was there already, he said.
"Hyundai is the biggest threat for the Japanese automakers," Nakamura told The AP. "They have the technology, but they seem to have cheaper labor."
To compete, Japanese manufacturers need to start relying more on their creative "sensibilities" to add value to a product almost like an European designer bag, Nakamura said.
Buyers must want to pay more in the same way Japanese gourmet delicacies called "kaiseki" can command higher prices than some Korean dishes, he said.
"We have to offer the equivalents of sushi, tempura and kaiseki to compete against Korean barbecue," Nakamura said.
Hyundai, which boasts Kia Motors Corp. as an affiliate, recently grabbed 5 percent global market share for the first time, despite a declining global market.
These days, Hyundai and Kia form the world's fifth-largest automative group and have seen sales surge in the U.S. and Europe, with only Toyota Motor Corp., the world's biggest automaker, outselling it among the Japanese.
In the U.S., Hyundai was the only one among the major automakers, including the Japanese, to record better sales last month, up 27 percent from September 2008.
The Japanese automakers have been battered by last year's financial crisis, although they are counting on expansion in emerging markets to offset declining sales in established markets such as the U.S., Europe and Japan.
Nissan, Japan's No. 3 automaker, based in Yokohama, lost 16.5 billion yen ($185 million) for the quarter ended June 30. Hyundai, by contrast, earned 811.85 billion won ($691 million) in the April-June period -- a quarterly record for the company.
Christopher Richter, auto analyst at Calyon Capital Markets Asia in Tokyo, said that Hyundai was growing not only in the U.S. market, where it was taking advantage of a weakened GM to grab sales, but has been strong for years in emerging nations, such as China and India.
Although both the Korean won and Japanese yen have been strengthening, eroding the value of overseas earnings for both exporting nations, the yen's jump has been bigger, further putting the Japanese at a disadvantage, Richter said.
He said the smaller Japanese makers, like Nissan and Mazda Motor Corp., were especially at risk because their products didn't rank as high in quality surveys as Toyota and Honda, and compete more directly with Hyundai offerings.
"They are not an act you want to dismiss lightly," he said. "They are increasingly going to create a bigger challenge to the Japanese."
Hyundai spokesman Oles Gadacz said the company had no comment.
Tokyo-based Honda, with its longtime strength in smaller models reputed for mileage such as the Fit subcompact, has emerged from the global recession in better shape than other Japanese automakers.
But the nation's No. 2 automaker barely eked out a 7.5 billion yen ($84 million) profit in April-June.
Honda's Ito acknowledged as possible threats the U.S. automakers, including General Motors Co. and Ford Motor Co., which have been reshaping their businesses and preparing smaller fuel-efficient models that are likely to better compete against Honda models.
But he appeared to be merely being polite in talking about the Americans and turned adamant when the topic became Hyundai.
"Its growth is fantastic," said Ito.
AP Business Writer Kelly Olsen in Seoul contributed to this story.
TOKYO (AP) -- Hyundai Motor Co. -- not the up-and-coming Chinese, nor the leaner meaner Americans -- is the automaker that has the Japanese seriously worried.
Talk to any Japanese auto executive, and the official is likely to say the South Korean automaker is rapidly emerging as the most feared competitor to Japan's world-leading car companies.
"Hyundai is awesome," said Honda Motor Co. Chief Executive Takanobu Ito in an interview with The Associated Press this week. "They are undoubtedly a threat because their products are cheap, and the quality is improving."
Nissan Motor Co. Senior Vice President Shiro Nakamura agreed. He compared the rise of Hyundai to Samsung Electronics Co. of South Korea, which has grown to rival Japan's Sony Corp., and said its cars were riding on their reputation for quality and affordability.
It may take another decade for China's automakers to start seriously competing with Nissan, but Hyundai was there already, he said.
"Hyundai is the biggest threat for the Japanese automakers," Nakamura told The AP. "They have the technology, but they seem to have cheaper labor."
To compete, Japanese manufacturers need to start relying more on their creative "sensibilities" to add value to a product almost like an European designer bag, Nakamura said.
Buyers must want to pay more in the same way Japanese gourmet delicacies called "kaiseki" can command higher prices than some Korean dishes, he said.
"We have to offer the equivalents of sushi, tempura and kaiseki to compete against Korean barbecue," Nakamura said.
Hyundai, which boasts Kia Motors Corp. as an affiliate, recently grabbed 5 percent global market share for the first time, despite a declining global market.
These days, Hyundai and Kia form the world's fifth-largest automative group and have seen sales surge in the U.S. and Europe, with only Toyota Motor Corp., the world's biggest automaker, outselling it among the Japanese.
In the U.S., Hyundai was the only one among the major automakers, including the Japanese, to record better sales last month, up 27 percent from September 2008.
The Japanese automakers have been battered by last year's financial crisis, although they are counting on expansion in emerging markets to offset declining sales in established markets such as the U.S., Europe and Japan.
Nissan, Japan's No. 3 automaker, based in Yokohama, lost 16.5 billion yen ($185 million) for the quarter ended June 30. Hyundai, by contrast, earned 811.85 billion won ($691 million) in the April-June period -- a quarterly record for the company.
Christopher Richter, auto analyst at Calyon Capital Markets Asia in Tokyo, said that Hyundai was growing not only in the U.S. market, where it was taking advantage of a weakened GM to grab sales, but has been strong for years in emerging nations, such as China and India.
Although both the Korean won and Japanese yen have been strengthening, eroding the value of overseas earnings for both exporting nations, the yen's jump has been bigger, further putting the Japanese at a disadvantage, Richter said.
He said the smaller Japanese makers, like Nissan and Mazda Motor Corp., were especially at risk because their products didn't rank as high in quality surveys as Toyota and Honda, and compete more directly with Hyundai offerings.
"They are not an act you want to dismiss lightly," he said. "They are increasingly going to create a bigger challenge to the Japanese."
Hyundai spokesman Oles Gadacz said the company had no comment.
Tokyo-based Honda, with its longtime strength in smaller models reputed for mileage such as the Fit subcompact, has emerged from the global recession in better shape than other Japanese automakers.
But the nation's No. 2 automaker barely eked out a 7.5 billion yen ($84 million) profit in April-June.
Honda's Ito acknowledged as possible threats the U.S. automakers, including General Motors Co. and Ford Motor Co., which have been reshaping their businesses and preparing smaller fuel-efficient models that are likely to better compete against Honda models.
But he appeared to be merely being polite in talking about the Americans and turned adamant when the topic became Hyundai.
"Its growth is fantastic," said Ito.
AP Business Writer Kelly Olsen in Seoul contributed to this story.
10-02-09, 08:43 AM
#5
It would be folly for Japanese automakers to disregard Hyundai/Kia.
Lessons to be learned: build well built, efficient, and functional cars (note that Hyundai/Kia do not build a lot of SUVs nor sport cars) to the masses.
Enthusiasts be damned (you've seen how many have discredited Hyundai due to the lack of luxury, innovation, design, sport, and exclusivity). You don't account for the 95% of total sales figures...
Lessons to be learned: build well built, efficient, and functional cars (note that Hyundai/Kia do not build a lot of SUVs nor sport cars) to the masses.
Enthusiasts be damned (you've seen how many have discredited Hyundai due to the lack of luxury, innovation, design, sport, and exclusivity). You don't account for the 95% of total sales figures...
10-02-09, 08:54 AM
#6
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Hyundai is at a point in its growth where it really needs to stop trying too hard at copying other brands' looks (I'm thinking Genesis Coupe vs. G37, Kia Forte vs. Honda Civic) and start affirming a look of its own. Hyundai doesn't have any signature lines or designs. They're all stolen from everyone else.
Although I have to say that if you guys haven't been in the Genesis or the Genesis Coupe, you really need to visit your local Hyundai dealer and try them out. You'll be surprised, and wonder how BMW can justify a $20,000 premium for the priviledge of the Roundel.
Although I have to say that if you guys haven't been in the Genesis or the Genesis Coupe, you really need to visit your local Hyundai dealer and try them out. You'll be surprised, and wonder how BMW can justify a $20,000 premium for the priviledge of the Roundel.
10-02-09, 09:00 AM
#7
Lexus Fanatic
Hyundai is indeed serious competition to Japanese manufacturers now, but, IMO, Ford will soon also be. Many Ford products, like what we've seen at Hyundai, are showing signs of marked quality improvement. The Fusion Hybrid, for example, is probably the best American-badged vehicle I have seen in many years.....with the Chevy Malibu not far behind. Ford, not surprisingly, unlike GM and Chrysler, so far has gotten through this recession without any Government money or takeovers.
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10-02-09, 09:04 AM
#9
Lexus Fanatic
Yep. The Genesis 3.8L Track model I reviewed, for the money, had an astoundingly good chassis, steering feel, and drivetrain for the money (31k)......nearing or equalling many BMWs that sell for far more money. I test-drive a lot of cars, and I don't make that statement lightly.
10-02-09, 09:42 AM
#10
Lexus Champion
It was the Americans, then the Europeans, then the Japanese and now the Koreans. Who knows as to who's next in line this cycle of dominance?
Indeed, that's globalization for you
Anyways, there are many examples out there, though from what I personally observed:
In the Philippines, the number of Genesis Coupe units HAVE already outweighed the number of Mazda MX-5 RHT units available in our shores here. Of course, the MX-5 Miata Roadster (NCEC) is a landmark vehicle and is lightweight, agile and perfect for mountain racing and touge drifting.
However, in terms of offering more value for money (from a sports car perspective), the GC is becoming a more dominant entity.
Imagine, here in the Philippines, the Genesis Coupe 3.8 V6 6AT for example is CHEAPER than an MX-5 with 6MT. Plus, with the GC, you get more 'car' (in the form of features and extra space) compared to the MX-5.
Heck, even after installing the Brembo brake package and the paddle shift, it is still slightly cheaper than the MX-5 Philippine-spec model. Plus, with Hyundai Philippines warranty of 5 years (compared to what Mazda offers here which is just 3 years), it evens the odds.
And this is how Hyundai tries to win consumers here in where I'm from. In the midst of being surrounded by competitors (who are already well-established), it is through these things, along with the desire to improve over their previous gen products, that make them where they are now.
Indeed, the more they improve and become better, then the more that they become more established in this highly competitive automotive business.
Indeed, that's globalization for you
Anyways, there are many examples out there, though from what I personally observed:
In the Philippines, the number of Genesis Coupe units HAVE already outweighed the number of Mazda MX-5 RHT units available in our shores here. Of course, the MX-5 Miata Roadster (NCEC) is a landmark vehicle and is lightweight, agile and perfect for mountain racing and touge drifting.
However, in terms of offering more value for money (from a sports car perspective), the GC is becoming a more dominant entity.
Imagine, here in the Philippines, the Genesis Coupe 3.8 V6 6AT for example is CHEAPER than an MX-5 with 6MT. Plus, with the GC, you get more 'car' (in the form of features and extra space) compared to the MX-5.
Heck, even after installing the Brembo brake package and the paddle shift, it is still slightly cheaper than the MX-5 Philippine-spec model. Plus, with Hyundai Philippines warranty of 5 years (compared to what Mazda offers here which is just 3 years), it evens the odds.
And this is how Hyundai tries to win consumers here in where I'm from. In the midst of being surrounded by competitors (who are already well-established), it is through these things, along with the desire to improve over their previous gen products, that make them where they are now.
Indeed, the more they improve and become better, then the more that they become more established in this highly competitive automotive business.
10-02-09, 09:51 AM
#11
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Obviously the Japanese makers would be foolish to underestimate Hyundai, but the major brands (except Honda) are not underestimating Hyundai. I do agree Mazda, Suzuki, and the smaller makes are more at risk than the Japanese "Big 3".
Also on this topic, Hyundai should be wise not to underestimate it's own competition. The Chinese makers in the future are going to put a lot of pressure and competition on Hyundai, so they need to watch out for that.
Also on this topic, Hyundai should be wise not to underestimate it's own competition. The Chinese makers in the future are going to put a lot of pressure and competition on Hyundai, so they need to watch out for that.
10-02-09, 09:55 AM
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Obviously the Japanese makers would be foolish to underestimate Hyundai, but the major brands (except Honda) are not underestimating Hyundai. I do agree Mazda, Suzuki, and the smaller makes are more at risk than the Japanese "Big 3".
Also on this topic, Hyundai should be wise not to underestimate it's own competition. The Chinese makers in the future are going to put a lot of pressure and competition on Hyundai, so they need to watch out for that.
Also on this topic, Hyundai should be wise not to underestimate it's own competition. The Chinese makers in the future are going to put a lot of pressure and competition on Hyundai, so they need to watch out for that.
I would've considered buying that, but now we're left with this:
10-02-09, 10:14 AM
#14
I don't think the Japanese are dumb enough to underestimate Hyundai's potential, but could all this "oh, we're afraid, we're afraid..." all to give Hyundai a false sense of supremacy so that they keep blowing up their hot heads and one day explode/implode? Just look at the sales numbers, yes they are rising, but so are the prices of the Hyundai vehicles. At what point does price exceed expectation and then on the horizon who is going to take over where Hyundai was?
10-02-09, 10:20 AM
#15
Hyundai really IMO is the only company right now that is competing with toyota and Infiniti.. THere was just a recent article in R&T or MT with the Genesis coupe and G35 coupe.. The G35 i believe won the track comparison bt not by much.. THe Genesis received higher number in the aesthetics catagory..
So Yes.. Toyota should worry. If Hyundai stays on track like what they did with the Genesis than we should expect greater vehicles in the future.
So Yes.. Toyota should worry. If Hyundai stays on track like what they did with the Genesis than we should expect greater vehicles in the future.