We are worried about Hyundai: Toyota

[EKam]

Toyota Motor Corp, one of the world's most successful automakers, claims to be afraid of a lot of things: complacency, competition, and success itself.

But in the United States, rival Hyundai Motor Co may well be at the top of Toyota's list.

"We're worried about them," Yukitoshi Funo, chairman of Toyota Motor Sales USA, told reporters in Detroit this week.

"Our main competitors here are essentially Honda Motor Co Ltd, Nissan Motor Co Ltd and Hyundai, but Hyundai is the one we are very carefully watching," he said on the sidelines of the North American International Auto Show in Detroit.

South Korea's top automaker, until recently a target of jokes about broken-down parts, has dramatically raised its profile on the world stage with a benchmark study by research firm JD Power showing an improvement in quality to match the best Japanese brands.

Hyundai now sells far more cars than Volkswagen AG, Mazda Motor Corp and Subaru in the US.

It expects sales to rise more than 10 per cent this year to over 500,000 units, in an overall market that it reckons will shrink.

In 2005, Hyundai's sales fell 7.7 per cent to 418,615 units, giving it a market share of 2.5 per cent.

"The quality story is resonating," Bob Cosmai, Chief Executive Officer of Hyundai Motor America, said at the Detroit show.

"We're broadening the depth of our product line, and it's a great value story. When I joined the company at the end of 1990 we sold 90,000 cars, so we're making our presence really known."

Unveiling the remodelled Santa Fe sport utility vehicle at the show, Cosmai said its popular model would be priced "thousands of dollars" below a comparably equipped Toyota Highlander with six airbags, electronic stability control and other advanced safety features.

As Cosmai admits, Hyundai's path to success has been modelled closely on Toyota's strategy of striving for top quality and competitive prices, and appealing to a broad range of customers with wide-ranging cars.

That's what worries Toyota most.

"Honda and Nissan are also formidable rivals, but they have a distinct business approach and profile from us," Toyota's Funo said. "Hyundai, meanwhile, is essentially doing what we're doing."

But Funo added that Toyota would not and could not compete with Hyundai on prices, and would instead focus on building its brand and value.

"Our costs aren't as low as Hyundai's. We don't want to compete on their terms," he said.

His Hyundai counterpart, meanwhile, seemed to be adopting Toyota's characteristic modesty when asked how the South Korean company stacked up.

"I'm not sure anyone's a big threat to Toyota right now," Cosmai said.

"They're a very successful company," he said, adding that Hyundai benchmarked much of its processes and design characteristics around Toyota. "We have a long way to go."

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[jhbhatia]

I recall this statement someone made a long long time ago: "we're number 2, it means we try a bit harder"...toyota is currently at number 2 position. its nice they already assume themselves as number 1 in the world and forsee their competition. Yes its tought to compete with hyundai. But i honestly think that the scion lineup has been held back, as they themselves (with more vehicles under their belt like avenis and rav4) could themselves compete with Hyundai. Like how Camry, Es has been stedfast, we need a cheaper alternative to rav4 for the scion lineup and avenis sedan as well).

[Bakemono]

Toyota should be worried about Hyundai and the Chinese cars that are coming soon.
If they can equal Toyota's quality reputation at cheaper prices, Toyota is going to be in trouble.
Its good to see that Toyota isnt falling into the habit of complacency, waiting for others to catch up before they make a change. Thats what got Ford and GM in the trouble they are in now.

[Cyorke]

DOnt you think that with Hyundai starting to build cars in the US they will ahve to raise their prices to some extent. I mean labor and materials are cheap in S.Korea I am assuming. But if they are having to ship parts from Korea to the US to build the cars then that increases the price. I am also sure that factory workers in AL are making considerably more per hour than the average worker in Korea. with those factors I would think it would force Hyundai to raise prices to some extent. I am sure they can have the US built cars as somewhat of a loss leader and then make the margins up on the cars that are being imported from Korea.
If they are following Toyota's lead I am sure some of this had to do with prices being raised over the course of time. I dont see how they can continue to have all of the features they do and still be able to sell cars at the prices they are selling them at.

Just another thought, I noticed that the 06 Sonatas are already running $2000 incentives right now. IF they are selling so well and dong such a good job it seems awfully early in the year to be rebating the 06's already. This is not some local add I ahve seen where the dealer claims to beselling at thousands under invoice. It is a actual Hyundai corporate ad.

[84Cressida]

Hyundai isn't out of the woods yet. Their resale value is shitty, as is Kia, long term quality & more. Do you know Hyundai has $2,000 in rebates on '06 Sonata V6s?

[shockel]

the quality one gets in a toyota car cannot be matched by no one.... there is no car in the world that can be driven 200000 miles and has no oil leak. toyota are awsome and well built///

[Why?]

The Chinese cars are nothing to worry about. The ones they will be able to import without breaking patent laws around the world are pathetic. I have heard that they make Yugo's look like good cars.

As for Hyundai, they are a decent company that makes decent cars. That is it. The reliability is nowhere near Toyota.

[situman]

Originally Posted by Cyorke

DOnt you think that with Hyundai starting to build cars in the US they will ahve to raise their prices to some extent. I mean labor and materials are cheap in S.Korea I am assuming. But if they are having to ship parts from Korea to the US to build the cars then that increases the price. I am also sure that factory workers in AL are making considerably more per hour than the average worker in Korea. with those factors I would think it would force Hyundai to raise prices to some extent. I am sure they can have the US built cars as somewhat of a loss leader and then make the margins up on the cars that are being imported from Korea.
If they are following Toyota's lead I am sure some of this had to do with prices being raised over the course of time. I dont see how they can continue to have all of the features they do and still be able to sell cars at the prices they are selling them at.

Just another thought, I noticed that the 06 Sonatas are already running $2000 incentives right now. IF they are selling so well and dong such a good job it seems awfully early in the year to be rebating the 06's already. This is not some local add I ahve seen where the dealer claims to beselling at thousands under invoice. It is a actual Hyundai corporate ad.

It's not that Toyota cannot match Hyundai's pricing structure, I think it's Toyota rather not go to the level of Hyundai. WIth Toyota's massive buying power, I am sure they can get parts for much cheaper than Hyundai. In order to thumb down Hyundai, Scion really needs to step up and offer more competitive products. For one, offer more powerful engines.

[dsmnick]

Originally Posted by shockel

the quality one gets in a toyota car cannot be matched by no one.... there is no car in the world that can be driven 200000 miles and has no oil leak. toyota are awsome and well built///

My 1990 Chevy Lumina Euro had 210,000 miles with no oil leaking when I sold it. So much for that theory.

Toyotas are well-built, but no car is perfect.

[Lord_Anarchy]

Kia/Hyundai are steppin' up on reliability people! Don't sleep on 'em. They are FAIRLY decent but their resale value is nowhere near as good. Their depreciation rate is not too nice either. So, for now, Toyota can breathe easy but I BET it probably does make Hyundai feel all big now that Toyota acknowledges ever-growing unit sales. The Camry, IS350, Rav4, Avalon.. They are all comin' to the rescue. The funny thing is that such ho-hum nameplates make big noise in the industry because "the new Camry" articles are poppin' up everywhere. Can't remember the last time I saw hoopla for a Impala or Accord

[xpeed]

I don't care what the world say about Hyundai. Heck, if I was the CEO of Hyundai and Toyota stated that they would be watching carefully at Hyundai, I would be damn proud. To get acknowledge by one of the biggest auto makers is truly a great feat.

Also, even though Hyundai may seem to use cheap parts, I kid you not, their labor aren't cheap and the parts are similar to Toyotas, only slightly cheaper but not much difference. You guys should really try out the higher end models only sold in Korea. I'm not talking about the XG and the new Azeras (Grandeur, A.K.A XG350 here in the states) They really use high quality materials for their luxury models in Korea. Here, we only get the benchmark (Azera, Flagship here in the states for now) and the Sonatas.

If you check out Hyundai's flagship car, Equus, it's really quite nice and comfortable. Almost comparison to the European and Lexus brands. You guys are probably saying that I'm full of it, well, for your information, I had the chance to ride in one and one word came up to my mind, "A Hyundai?"

[Tommy]

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[CACressida]

Originally Posted by Why?

The Chinese cars are nothing to worry about. The ones they will be able to import without breaking patent laws around the world are pathetic. I have heard that they make Yugo's look like good cars.

As for Hyundai, they are a decent company that makes decent cars. That is it. The reliability is nowhere near Toyota.

When I was in Yemen about 10months ago, I seen the biggest lawsuit drive down the road. A chinese Toyota 4Runner look-alike. It looks exactly like a 3rd Gen 4Runner (1996-2002) from the front and a monkeys ass from the back. Theres also a Hilux look-alike that exactly looks like a Hilux all over. When you pay attention to the bodylines, they dont line up. I went to the Chinese dealership to check one of these things out, and it uses a Toyota Motor!!! a tiny 4banger that says Toyota in Japanese. Anyway, the quality inside sucks a monkeys left nut. It kinda looks nice, but when you touch it, everything is crap. The fake wood looks decent but the plastic moldings are all razor sharp. The sitting on a concrete stairstep is much more comfortable to sit on then the seats, and everything just doesnt line up right on the inside. POS.

[pjsammy]

the chinese cars will only be able to sell on price.....that seemed to work well for hyundai in the early 90s

[Bakemono]

Originally Posted by dsmnick

My 1990 Chevy Lumina Euro had 210,000 miles with no oil leaking when I sold it. So much for that theory.

Toyotas are well-built, but no car is perfect.

I think the point he was trying to make is that Toyota has far fewer problems than other brands. Thats something that you cannot despute, just look at the resale value of a Toyota vs. any other brand.