 A model stands beside a Hyundai Motor sports utility vehicle at the 2003 Toyko Motor Show. After eight years of ineffective results, Hyundai announced recently that it was pulling out of Japanese car market. / Korea Times File |
By Kim Tong-hyung
Staff Reporter
A surging Hyundai Motor is gaining on Toyota in the global car industry, but the competition between the two companies remains lopsided in their Asian base markets, where the Japanese maker firmly holds the upper-hand.
The inevitable became reality last week when Hyundai officially announced that it is pulling out from the Japanese car market, where it continued a muted presence since 2001 and failed to sell 800 cars through October this year. Although it won’t be selling new cars, Hyundai will continue to provide services to its existing Japanese customers, company officials said.
``We have concluded that it would be better to halt our investment in a struggling market, and focus on more promising markets such as the United States and China,’’ a Hyundai Motor official said.
Hyundai’s eight years of ineptitude in Japan and ungraceful exit from the market certainly stings, especially when it finds Toyota beginning to flex a bigger muscle on its home turf.
Toyota has established itself as one of Korea’s most popular imported auto brands, thanks to the strong sales of its premium vehicles made by Lexus, its luxury vehicle division.
And in recent months, Toyota has been successfully leveraging its presence to the mid-priced segment, which has been traditionally dominated by Hyundai and other domestic carmakers.
The company introduced four new models in Korea last month, including mid-sized sedan “Camry” and the hybrid-electric car “Prius,” and needed just three weeks to sell more than 5,000 units of the newly-released products.
Toyota is not the only Japanese auto brand that is enjoying growing popularity among Korean drivers. Honda led all imported auto brands by selling about 12,350 cars last year. Combining the sales of Toyota and Nissan, more than 21,000 Japanese cars were sold in the Korean market last year, and it seems all but assured that the number will be significantly bigger by the end of this year.
Obviously, persuading Japanese drivers to take a chance on Korean cars is expected to be more of a difficult challenge. Although it is bailing hands for now, Hyundai could ill-afford to miss out on one of Asia’s biggest auto markets, and most industry watchers here expect the Korean firm to regroup and reenter the Japanese market in two or three years.
It remains to be seen whether Hyundai will be able to improve its brand image in time to convince Japanese consumers that its cars are just as dependable and sophisticated as the products made by their domestic brands.
An adjustment in business strategies will also be critical, industry watchers say. More than two-thirds of the passenger vehicles sold in Japan are small cars, but Hyundai has been stubborn in building its business strategies around mid-sized cars in the past years.
Despite its struggles in Japan, Hyundai has improved its presence in the global car industry in the past year, successfully exploiting the softened competition during the economic turmoil that had luxury marquees such as Mercedes-Benz, Lexus and BMW struggling.
The Hyundai-Kia Automotive Group, which includes Hyundai and smaller affiliate, Kia Motors, is currently Asia’s biggest carmaker after Toyota and edged Ford in recent months for the No. 4 spot in the hierarchy of the global car industry.
From the fourth quarter of last year to the third quarter of this year, Hyundai-Kia sold around 4.5 million cars around the world, while Toyota came third with 5.46 million units. Volkswagen emerged at the top of the table with 5.68 million units sold during the period, followed by General Motors, which sold 5.51 million cars.
thkim@koreatimes.co.kr
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