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How did Japan's Crisis Affect Korean Auto Industry?
tom2011
post Mar 26 2011, 05:46 AM
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Renault/Samsung, and GM Korea are both facing parts shortage, which will limit their production and domestic sales, hurting their bottom lines. Hyundai and Kia on the other hand, which do not rely on Japanese parts, are expected to clean up the domestic market, and increase their market shares further overseas.

http://rumors.automobilemag.com/earthquake...ndai-36027.html

This post has been edited by tom2011: Mar 26 2011, 05:47 AM
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initially
post Apr 2 2011, 06:18 PM
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Hyundai/Kia/etc are doing well internationally having increased the quality of their products exponentially in the past few years (they did start out as econo-boxes). Chinese car makers like Great Wall is currently filling that role right now, but in 2-3 years time I would expect them to compete heavily with Hyundai for budget cars, trucks and SUVs.

On an international scale, the Japanese car makers however has the mid to upper tier luxury models to themselves as well as sports cars, plus they lead all Asian manufacturers in motoring technologies such as electric and hydrogen powered vehicles, self-parking, double clutching gearboxes and so on. This takes years to develop, if Korea or China wants some of that then they will have to buy parts and copy the technology (almost impossible). Domestically, the same Japanese companies have already created an untouchable market for themselves selling kei cars/vans/trucks.
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tom2011
post Apr 2 2011, 09:16 PM
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QUOTE (initially @ Apr 3 2011, 09:18 AM) *
Hyundai/Kia/etc are doing well internationally having increased the quality of their products exponentially in the past few years (they did start out as econo-boxes). Chinese car makers like Great Wall is currently filling that role right now, but in 2-3 years time I would expect them to compete heavily with Hyundai for budget cars, trucks and SUVs.

On an international scale, the Japanese car makers however has the mid to upper tier luxury models to themselves as well as sports cars, plus they lead all Asian manufacturers in motoring technologies such as electric and hydrogen powered vehicles, self-parking, double clutching gearboxes and so on. This takes years to develop, if Korea or China wants some of that then they will have to buy parts and copy the technology (almost impossible). Domestically, the same Japanese companies have already created an untouchable market for themselves selling kei cars/vans/trucks.


I think you're really underestimating Hyundai here. My company supplies them with some of the vital components that they need to make cars, and I can tell you right now, they do not rely on Japanese component makers at all. It's one of the few auto companies in the world that doesn't.
QUOTE
electric and hydrogen powered vehicles, self-parking, double clutching gearboxes


Hyundai will roll out a hybrid Sonata car in a few weeks based on a new battery that the Japanese have yet to use. And this car will not be priced way above a regular car, like the Toyota. Hyundai is also testing a hydrogen based car and they are planning to sell them in 2012, three years ahead of Toyota and Honda. See here: http://inhabitat.com/hyundai-to-sell-hydro...l-cars-in-2012/ As for dual clutching gearbox? Hyundai got that covered as well, with the new Veloster car that is on sale next month, and plans for putting them in the new i40 and possibly in a 200+ HP turbo charged Avante (called the Elantra in North America).

It took Hyundai 30+ years for them to get to this stage, where they are just starting to be known as a reliable brand. But they still have a lingering negative image that's out of step in time. To get to where they are today, they had to go through a lot of frustration, mistakes, hard work, research, and a lot of eating humble pie especially vis a vie the Western media whose favorite target of joke was Hyundai. That is why I think it will take much more than 2 or 3 years for the Chinese to get to the same stage as Hyundai - even if they theoretically started making the same quality cars as Hyundai. In the auto industry, consumers are much more fickled than consumers who buy fridges. They not only demand reliable cars, they also demand image. No matter how cheap your cars are, they will not buy it if the image is poor - as Hyundai (which is the second most reliable non-luxury brand in North America according to JD Power's 3 year study of year 2008 models) learned harshly over the last couple of decades. That is something the Chinese auto makers will also have to go through - not just build quality, but also build brand image - sort of like paying their dues. And even then, as Hyundai has learned, may not be enough because once you got that image of low quality cheap car, it's very difficult to shake the image and it will take decades for that negative image to be shed. I'm not saying that China won't eventually do it. I'm saying it's highly doubtful that they can do that in 2 or 3 years (I'm talking about in the Western markets where most of the sales and money revenue and trends are).

This post has been edited by tom2011: Apr 2 2011, 09:42 PM
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initially
post Apr 4 2011, 07:10 PM
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QUOTE (tom2011 @ Apr 2 2011, 09:16 PM) *
I think you're really underestimating Hyundai here. My company supplies them with some of the vital components that they need to make cars, and I can tell you right now, they do not rely on Japanese component makers at all. It's one of the few auto companies in the world that doesn't.


I'm not trying to undermine Hyundai by saying that they use Japanese parts, however through research and development, companies often have to assess other brands to develop their own even if it means buying them. This is normal behaviour in the motoring industry. Once upon a time Hyundai were using Mitsubishi engines where much of the DNA may have transcended into current engines.

QUOTE
Hyundai will roll out a hybrid Sonata car in a few weeks based on a new battery that the Japanese have yet to use. And this car will not be priced way above a regular car, like the Toyota. Hyundai is also testing a hydrogen based car and they are planning to sell them in 2012, three years ahead of Toyota and Honda. See here: http://inhabitat.com/hyundai-to-sell-hydro...l-cars-in-2012/ As for dual clutching gearbox? Hyundai got that covered as well, with the new Veloster car that is on sale next month, and plans for putting them in the new i40 and possibly in a 200+ HP turbo charged Avante (called the Elantra in North America).


The "new battery" that you're referring to is simply lithium polymer, the same technology used by remote controlled cars, notebooks and wireless devices. The Tesla Roadster has it, even Audi have already tested this successfully last year. The problem with it is that it costs more, runs hotter and doesn't last as long as NiMH which can eventually compromise safety standards if not developed right. Hyundai might however try to develop a market where these batteries have to be consumed every 2-3 years just like the existing batteries normally used for starting up and electrics until the technology matures and can be used safely. I think if Toyota were confident in the technology they would have used it by now. We can only wait and see.

Honda have been testing the FCX since 2006 and have already sold them in numbers in the US and Japan, but only in destinated areas where Hydrogen pumps are facilitated. Hydrogen technology has to be a nationally accepted alternative to petrol/gas/diesel in Korea for it to sell. I have never seen a Hydrogen pump available anywhere in Seoul.

Also, there is a big difference between promising and actually producing these hydrogen and dual-clutching cars in a couple of years. Again, we can only wait and see if Hyundai can deliver in such a short time without any real world simulation of actually testing by real world consumers, particularly on a global scale.

QUOTE
It took Hyundai 30+ years for them to get to this stage, where they are just starting to be known as a reliable brand. But they still have a lingering negative image that's out of step in time. To get to where they are today, they had to go through a lot of frustration, mistakes, hard work, research, and a lot of eating humble pie especially vis a vie the Western media whose favorite target of joke was Hyundai. That is why I think it will take much more than 2 or 3 years for the Chinese to get to the same stage as Hyundai - even if they theoretically started making the same quality cars as Hyundai. In the auto industry, consumers are much more fickled than consumers who buy fridges. They not only demand reliable cars, they also demand image. No matter how cheap your cars are, they will not buy it if the image is poor - as Hyundai (which is the second most reliable non-luxury brand in North America according to JD Power's 3 year study of year 2008 models) learned harshly over the last couple of decades. That is something the Chinese auto makers will also have to go through - not just build quality, but also build brand image - sort of like paying their dues. And even then, as Hyundai has learned, may not be enough because once you got that image of low quality cheap car, it's very difficult to shake the image and it will take decades for that negative image to be shed. I'm not saying that China won't eventually do it. I'm saying it's highly doubtful that they can do that in 2 or 3 years (I'm talking about in the Western markets where most of the sales and money revenue and trends are).


As I've said in my previous post, Hyundai/Kia has definitely improved over the past few years and yes they have always been subjected to market taunting and social stigmas because of their humble beginnings. But like I said, if Hyundai is to compete globally then not only do they have to follow and catch up to the Japanese, but they also have to watch their backs with Chinese manufacturers in the rear. Many European and North American companies have used China as a basis for developing their products, I wouldn't be surprised if China came out with very similar local brands to compete at a much cheaper price. In fact, I wouldn't be surprised if China decide to buy out some of these brands (just like India bought out Jaguar and Malaysia buying out Lotus). That would certainly be a quick fix to market affordable cars while retaining a "brand name".

I like where Hyundai is heading (drove a rental i30 once and loved it), however I would like to see more Asian companies take on genres other than the economy-mid tier market such as motor racing (F1), high level sports cars (to compete against Ferrari, Lambos etc), aerospace technologies and agricultural machineries rather than compete against one another in the same market. The Japanese has no less than 12 different motoring companies often residing in the same industrial park, yet they are still able to survive in the same industry specialising in different sub markets.
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tom2011
post Apr 4 2011, 07:37 PM
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QUOTE (initially @ Apr 5 2011, 10:10 AM) *
I'm not trying to undermine Hyundai by saying that they use Japanese parts, however through research and development, companies often have to assess other brands to develop their own even if it means buying them. This is normal behaviour in the motoring industry. Once upon a time Hyundai were using Mitsubishi engines where much of the DNA may have transcended into current engines.



The "new battery" that you're referring to is simply lithium polymer, the same technology used by remote controlled cars, notebooks and wireless devices. The Tesla Roadster has it, even Audi have already tested this successfully last year. The problem with it is that it costs more, runs hotter and doesn't last as long as NiMH which can eventually compromise safety standards if not developed right. Hyundai might however try to develop a market where these batteries have to be consumed every 2-3 years just like the existing batteries normally used for starting up and electrics until the technology matures and can be used safely. I think if Toyota were confident in the technology they would have used it by now. We can only wait and see.

Honda have been testing the FCX since 2006 and have already sold them in numbers in the US and Japan, but only in destinated areas where Hydrogen pumps are facilitated. Hydrogen technology has to be a nationally accepted alternative to petrol/gas/diesel in Korea for it to sell. I have never seen a Hydrogen pump available anywhere in Seoul.

Also, there is a big difference between promising and actually producing these hydrogen and dual-clutching cars in a couple of years. Again, we can only wait and see if Hyundai can deliver in such a short time without any real world simulation of actually testing by real world consumers, particularly on a global scale.



As I've said in my previous post, Hyundai/Kia has definitely improved over the past few years and yes they have always been subjected to market taunting and social stigmas because of their humble beginnings. But like I said, if Hyundai is to compete globally then not only do they have to follow and catch up to the Japanese, but they also have to watch their backs with Chinese manufacturers in the rear. Many European and North American companies have used China as a basis for developing their products, I wouldn't be surprised if China came out with very similar local brands to compete at a much cheaper price. In fact, I wouldn't be surprised if China decide to buy out some of these brands (just like India bought out Jaguar and Malaysia buying out Lotus). That would certainly be a quick fix to market affordable cars while retaining a "brand name".

I like where Hyundai is heading (drove a rental i30 once and loved it), however I would like to see more Asian companies take on genres other than the economy-mid tier market such as motor racing (F1), high level sports cars (to compete against Ferrari, Lambos etc), aerospace technologies and agricultural machineries rather than compete against one another in the same market. The Japanese has no less than 12 different motoring companies often residing in the same industrial park, yet they are still able to survive in the same industry specialising in different sub markets.



One thing that Hyundai/KIA still lacks and still weak in, is its handling of its cars, and the steering wheel feed back of its cars back to the driver - meaning Hyundai cars translates into lack of entertainment factor for the driving enthusiasts who like to drive cars. Korean cars have always been criticized in this regard, and I still don't think they've overcome that hurdle. It seems always to be 1% short in that department, where the Japanese and Germans excel at. If you think of cars as tools to go from A to B, then this wouldn't matter much, as long as those cars can go A to B without any problems.

Having said that, other than the fun factor of their cars and the weaker brand name value, I really don't think Hyundai falls behind anymore in any area to the Japanese makes Honda and Toyota. Hyundai doesn't depend on the Japanese for any technology, and they can make any type of engines and any type of cars. Even within the Japanese makers, only Honda and Toyota are rated as first rate companies. If you look at three areas for non luxury brands: Initial customer satisfaction, 3 year long term reliability, and crash safety, Hyundai matches up very well with Honda and Toyota, often matching or sometimes beating them in these areas, certainly better than German and American cars in the reliability ratings. Even the traditional resale values of Hyundai is coming up quickly with the new Sonata and the Elantra, with second highest predicted resale values in their respective classes. I'm not sure what you mean when you say Hyundai still needs to catch up. Are you talking about catching them in sales figures?

This post has been edited by tom2011: Apr 4 2011, 07:39 PM
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KochiGachi
post Apr 4 2011, 08:21 PM
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I thought Hyundai have no interest in competing with BMW/Mercedes and all other luxury/sport car brands.
Hyundai is trying to compete and beat Toyota, Toyota didn't have much success from their luxury/sporting brands.

Hyundai makes affordable family cars and that's their current aim.
Expecting Hyundai be like some of the luxury cars then you guys are over estimating Hyundais' capability.

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Posts in this topic
- tom2011   How did Japan's Crisis Affect Korean Auto Industry?   Mar 26 2011, 05:46 AM
- - KraterosHellas   u are such a loyal korean as ever. keeps up with s...   Mar 26 2011, 06:08 AM
|- - tom2011   QUOTE (KraterosHellas @ Mar 26 2011, 09:0...   Mar 26 2011, 06:39 AM
- - KraterosHellas   ^if u don't know my ethnicity, clearly u haven...   Mar 26 2011, 06:51 AM
|- - tom2011   QUOTE (KraterosHellas @ Mar 26 2011, 09:5...   Mar 26 2011, 06:56 AM
|- - fivers   QUOTE (KraterosHellas @ Mar 26 2011, 06:5...   Mar 26 2011, 06:59 AM
|- - charizardpal   QUOTE (KraterosHellas @ Mar 26 2011, 07:5...   Apr 1 2011, 09:05 PM
|- - KraterosHellas   QUOTE (charizardpal @ Apr 1 2011, 09:05 P...   Apr 1 2011, 09:37 PM
- - KochiGachi   QUOTE (tom2011 @ Mar 26 2011, 09:46 PM) R...   Mar 26 2011, 08:19 AM
|- - tom2011   QUOTE (KochiGachi @ Mar 26 2011, 11:19 PM...   Mar 26 2011, 03:30 PM
- - DewDrop   Yes, Japanese auto-parts will get hurt since the e...   Mar 26 2011, 06:24 PM
- - KraterosHellas   don't japanese auto companies have most of the...   Mar 30 2011, 11:44 PM
- - Minq   Yeah I read about moving production to China as we...   Mar 31 2011, 12:17 AM
- - tom2011   Wall Street Journal says in the long term, many co...   Mar 31 2011, 12:30 AM
- - KraterosHellas   ^it's like a chain. japan-->the tigers--...   Mar 31 2011, 05:34 AM
|- - KaptainAmeriKa   QUOTE (KraterosHellas @ Mar 31 2011, 05:3...   Mar 31 2011, 03:22 PM
- - tom2011   Motortrend says Hyundai/KIA are one of the few aut...   Mar 31 2011, 03:56 PM
- - initially   Hyundai/Kia/etc are doing well internationally hav...   Apr 2 2011, 06:18 PM
- - tom2011   QUOTE (initially @ Apr 3 2011, 09:18 AM) ...   Apr 2 2011, 09:16 PM
- - initially   QUOTE (tom2011 @ Apr 2 2011, 09:16 PM) I ...   Apr 4 2011, 07:10 PM
- - tom2011   QUOTE (initially @ Apr 5 2011, 10:10 AM) ...   Apr 4 2011, 07:37 PM
- - KochiGachi   I thought Hyundai have no interest in competing wi...   Apr 4 2011, 08:21 PM
|- - KraterosHellas   QUOTE (KochiGachi @ Apr 4 2011, 08:21 PM)...   Apr 4 2011, 08:42 PM
- - initially   QUOTE (tom2011 @ Apr 4 2011, 07:37 PM) On...   Apr 4 2011, 08:57 PM


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