Hyundai: Destined for the Automotive Grave Yard?

There are only two survival techniques in the car market: outstanding quality or low price. If the price of a car is high but the quality similar to its rivals, it doesn't sell. If a poor-quality car costs more than its rivals, it disappears. That is the market rule.

Hyundai’s weapon had been a lower price among cars of similar quality. That advantage has gone because of the strong won, so Hyundais are disappearing from the U.S. market.

But even in the face of that threat, the Hyundai Motor Union striked no fewer than 13 times this year. Only one of these strikes, over a pay rise in July, had anything to do with working conditions at the firm. The remaining 12 walkouts came at the behest of the Korean Confederation of Trade Unions over such things as opposing legislation on a labor relations road map, blocking a free trade agreement between Korea and the U.S. and opposing legislation on irregular workers.

Will these on going labor issues signal the end of Hyundai?

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EL34 - 12/14/2006 4:07:28 PM

+5 Boost

I can't stand a car company that just copies.

Agent009 - 12/14/2006 4:14:24 PM

+1 Boost

Well at least they copy the Japanese, who copy the Germans, who look at the Americans and shake their heads...

EL34 - 12/14/2006 4:33:15 PM

+2 Boost

I mostly agree.

quizz - 12/14/2006 5:20:39 PM

-3 Boost

I must disagree with this statement: "If the price of a car is high but the quality similar to its rivals, it doesn't sell." There's one living exception...

Mercedes Benz price is SKY HIGH but the quality is below even American car standards - that's pretty bad. YET, MB sells like hotcakes simply because "it's a Benz". The C230? Sells. ML350? Sells. E350? Sells. These 3 cars are nothing special. Nothing a Volvo or Lexus can't do better for less.

07mcs - 12/14/2006 5:48:33 PM

+2 Boost

Sorry but the C230 sells cuz is a cheap car. You see so many of them is the USA. And the quality of the them is better than Ford or Chevrolet. Plus they offer many incentives and have good lease programs that is why you see many sales of MB's

07mcs - 12/14/2006 5:54:07 PM

+3 Boost

And the E350 sells, because it probably is the best sedan in the midsize premium market segment. Don't know about the ML350, I would much rather buy an X5

rocker - 12/14/2006 5:29:45 PM

+3 Boost

Not a very good company, ethically.

paul3230 - 12/14/2006 5:57:25 PM

+1 Boost

You are right in the fact that C230 sells because it's a cheaper car, but even MB's quality is below that of Chevy. Look at the latest JD Power's report for 06

neutral - 12/14/2006 7:04:54 PM

+2 Boost

This article seriously has to be kidding. So Hyundai has some labor issues, big deal. Everywhere I go I see Hyundai Sonatas and every now and then I see Azeras. Lets face it, they're great cars overall and an impressive value. If you ask me, Hyundai isn't going anywhere but up (and I am pro-USA/Europe at every occasion).

mstangpny07 - 12/14/2006 8:03:13 PM

+2 Boost

Very much agreed. I think Hyundai will eventually get to the top 5. And stay there.

07mcs - 12/15/2006 11:54:41 AM

+1 Boost

Hyundai has indeed increased sales. In my country Hyundai and Daewoos are everywhere.

sracekili - 12/14/2006 7:20:28 PM

+2 Boost

The auther of this article is pointing out the fact that Hyundai in the US is mainly percivied as a value oriented car company as of today. People buy their cars because they believe Hyundai cars are much cheaper than Toyotas or Hondas.

If Hyundai is the same price or even a bit higher(take away "impressive value" part out of the equation), I think there will be a lot of potential buyers look into Toyotas and Hondas instead. I think the editorial of this newspaper is quite right on the subject.

quizz - 12/14/2006 8:02:58 PM

-1 Boost

I agree with you, but I have to admit, the Tiburon is on track to be a "more desirable" car than the Honda Civic or Scion TC.

But you are right about the rest of Hyundai's line-up: the poor man's Camry/Accord/Sienna/Odyssey

sracekili - 12/14/2006 9:13:24 PM

-1 Boost

quizz, Yes, I agree that Tiburon has come a long way. Well, the Hyundai brand has come a long way as a matter of fact. The point I was trying to make on my post was "as of today", Hyundai is still catching up to the Japanese counterparts. Back in the mid 80s, virtually no one thought Hyundai will make in the US market this long just as Toyota and Honda received the same perception back in the 60s and 70s. I'm very interested to see how Hyundai will grow in the US market for the next 10 to 15 years.

DieselRules - 12/14/2006 11:49:00 PM

0 Boost

Hyundai's quality has been improving faster than ANY other brand. Remember the Pony in the '80s? Worst car for sale!

Now JD Power rates them as having fewer initial defects than even Toyota/Lexus (something that the Lexus fans really prefer that no-one mentions).
I don't buy into that JD Power rating because they don't take into account the complexity of the vehicle.

For example, I could build a vehicle with a lower defect count than Hyundai and Lexus both: its called a pogo-stick, with 3 parts (counting the spring). But you wouldn't want to drive it.

I'd take a Lexus over a Hynudai anyday (for the same price :)
Hyundai's automatic transmissions are a bit rough ... all the Japanese makers have better auto-boxes. But they'll eventual surmount that issue. They have good cars at great value. No short-term labour issues are going to take them down. (Besides, the Korean gov't wouldn't let it happen ... do you have any idea now many people they employ and how much they export!)

S4cabriofoxone - 12/17/2006 1:37:01 AM

0 Boost

Hardly.

I can see Hyundai becoming Toyota in a decade or so.

The US companies rose and fall. The Japanese companies have risen, and will soon fall- maybe not Honda, but Toyota's dominance, and cycle of life, will pass quicker than the US dominance did. Then, the Koreans will dominate for little more than a few years. Then, the Chinese companies will rule the world and stay their for about a year. US companies will lead once again. The cycle continues.

And, the whole time, VW stays strong, as the #5 automaker in the world.