Hyundai Motor’s Strength

Time to Do More to Turn Crisis Into Opportunity

The global auto industry is one of the manufacturing sectors hardest hit by the unprecedented financial and economic crisis. The Big Three U.S. automakers ― General Motors, Ford Motor and Chrysler ― have already been thrown into an uphill battle to keep afloat in the face of a credit pinch, plunging sales and snowballing losses.

However, this crisis might offer a new opportunity for some companies including South Korean carmakers ― Hyundai Motor and its affiliate, Kia Motors. It's encouraging news that Hyundai and Kia are faring better than their American and Japanese rivals. Hyundai said it sold 30,621 cars in the U.S. market last month, down 1.5 percent from a year earlier. But the figure represented a 24.9 percent jump from January. Kia sold 22,073 vehicles in February, up 0.2 percent from a year before.

Aided by the relatively strong performance, Hyundai and Kia's combined market share in the U.S. edged up from 7.1 percent in January to 7.6 percent in February. These figures are in stark contrast with 30-50 percent nosedives in car sales reported by Toyota, Honda, Nissan, GM and Ford. Optimists even say that it would not be hard for the two Korean automakers to increase their share to 10 percent in the foreseeable future. The two also enjoyed a 72.3 percent surge in their sales in China and a 31.1 percent climb in India last month.

Hyundai and Kia's remarkable results are drawing much attention not only from the industry but also from the public because the two firms are good at taking advantage of worldwide woes to strengthen their operations. Despite the overall deterioration in economic conditions, the local carmakers are enjoying a competitive edge due to the weakness of the Korean won against the U.S. dollar and the Japanese yen. Also, consumers' preference for cheap smaller cars has helped Hyundai and Kia avoid the fallout of the economic turmoil.

But what's more significant is that the two automakers have raised their competitiveness by improving product quality and adopting aggressive marketing strategies. Their generous incentives program has also attracted financially strapped American consumers because it allows them to return their vehicles free of charge within a year of purchase. As a result, Hyundai cars have won high scores in many product evaluations and consumer surveys.

In this regard, it is not surprising that Hyundai's Genesis luxury sedan was named the ``Car of the Year'' at the opening of the North American International Auto Show in Detroit in January. Hyundai Motor Chairman Chung Mong-koo said Friday that the company will embrace the worst crisis in decades as an opportunity to increase sales and raise its international profile.

The global auto industry is drawing a new map, with all carmakers engaging in a fierce battle for survival. Hyundai and Kia, which together form the world's fifth-largest automaker, need to learn a painful lesson from the decline of the three major U.S. carmakers. First of all, the Korean firms should concentrate on technology innovation to make quality cars and develop ``clean'' automobiles, including hybrids and electric-powered ones.

Hyundai and Kia are also required to improve productivity, explore new markets and consolidate consumer confidence. They must not spare any effort in research and development in order to become a real winner of the relentless survival game. And last but not least, the automakers should forge more cooperative ties with labor to emerge as the world's top manufacturer.