By Kim Tae-gyu
Staff Reporter
If U.S. journalist Thomas Friedman writes a book praising globalization in a few years, its title might be something like ``The Sonata and the Olive Tree,'' rather than the sequel to ``The Lexus and the Olive Tree.''
Toyota Motor, Asia's largest automaker as a global leader, is struggling to find its feet due to quality problems while Hyundai-Kia Automotive Group, the continent's runner-up, is looking to reduce the gap.
The question is whether Hyundai, famous for its Sonata brand, will be able to take advantage of the hitch suffered by Toyota, whose iconic brand is the Lexus, to further climb up the ladder of global competition and many bet Hyundai has a shot at doing so.
Officially, Hyundai refuses to comment on the issue as its Chief Financial Officer Lee Won-hee said on a conference call last Thursday, ``It is not proper to talk about the difficulties of our competitor.''
However, Korean Internet users have posted write-ups of the articles covering the massive recall of Toyota products that Hyundai officials would have a hard time suppressing their laughter.
Midway through last week, Toyota added 1.1 million more vehicles to its already huge recall list and decided to stop sales and the production of eight models so they can work out how to fix accelerator pedal problems.
Toyota has yet to confirm the exact numbers for its vehicles that are subject to repairs and recalls, but the figure is reported to reach about 7.6 million, which is similar to its annual sales.
On a more negative note, Toyota has to go through congressional investigations in the United States on whether it dealt with the issue in a straightforward way and the recall spree might follow suit in other car markets.
``It may sound very cold-blooded but in the world of business competition, more often than not the misery of my rivals leads to my happiness,'' Woori Investment & Securities analyst Michael Sohn said.
``The troubles of Toyota are unlikely to end soon. Then, Hyundai will have a good chance to undercut the market share of Toyota to extend its own. Its strong performances late last year also bodes well for the Seoul-based firm.''
Hyundai Motor and its affiliate Kia Motors combined to sell more than 4.5 million cars last year to enhance their global market share to a record high 7.8 percent, while most of its competitors slumped amid the financial crisis.
Suh Sung-moon, an analyst at Korea Investment & Securities, concurs with Sohn.
``By and large, the Toyota products subject to repairs or recalls overlap with the major vehicles from Hyundai. Hence, one of the biggest beneficiaries would be Hyundai,'' Suh said.
``In addition, Hyundai is set to launch its new models in the U.S. and the chances are that they will sell well because consumers have started to snap up Hyundai's new cars,'' he added.
Other market observers claim that the Toyota debacle is particularly devastating for the Japanese firm since its cornerstone asset has been quality. They said that Hyundai may take the reputation of the best quality on which Toyota has had bragging rights.
Another thing of note is that Toyota itself racked up huge benefits in the Japanese market thanks to the quality problems of Mitsubishi a decade ago.
While pointing out the Mitsubishi fiasco was aggravated because the firm reportedly tried to cover up the case, KB Securities analyst Shin Jung-gwan said that it remains to be seen if Toyota would follow the path of Mitsubishi.
``The bottom line is whether Toyota attempted to cover up the gas pedal defects and if it dealt with the issue in a proper way. We cannot know that for now but if guilty of any wrongdoings, it would be in big troubles,'' Shin said in a report.
When contacted, Toyota Korea refused to comment on the issue.