GS69

Contrasting Fortunes for Toyota, Hyundai Across the Sea of Japan
Posted by: Ian Rowley on November 30

Last month, I blogged about Toyota opening for business in Korea. A little over a month later, for all Toyota’s woes elsewhere, sales are going well. In October, Toyota beat a (admittedly conservative) target to sell 500 Prius, Camry sedans and RAV4 SUVs each month in Korea, despite sales not starting until Oct. 20. As of today, Toyota says it has received orders for 6,600 Toyota-brand models (it already exports Lexus). That means, subject to most of those orders being completed, the Japanese automaker has achieved its annual sales plan for Korea in less than six weeks.

Perhaps of more interest, though, is that Toyota’s hot start comes at a time when Hyundai is pulling out of car sales in Japan. The move, announced last week, will end an eight-year experiment which never came close to persuading Japanese car buyers to move out of their locally made cars in significant numbers. “Hyundai Motor has decided to suspend passenger vehicle sales in Japan and will instead allocate its resources to focus on commercial vehicle sales in the country,” the company said in a statement today.

Just as Toyota’s move into Korea makes sense, quitting passenger car sales in Japan looks a sensible move by Hyundai. While Hyundai, fueled by the weak won and impressive vehicles, has outpaced Japanese rivals during the global downturn, this year through October Japanese customers bought just 786 Hyundai cars (and one Kia). That’s better than 2008, but down from an annual peak of over 2,500 five years ago.

While many will blame protectionism, one problem in Japan is that over a third of car sales are 660cc mini-vehicles. That’s a segment in which non-Japanese carmakers, including Hyundai, choose not to compete. Another factor is that the Japanese auto market peaked in the mid-1990s and has been in decline ever since. And if all that wasn’t enough, among Japanese car buyers that buy foreign cars, most simply prefer something European: Ford, ranked 10th with year-to-date sales of 2,700, is the only non-European foreign auto brand that makes the top ten. The top three non-Japanese sellers are Volkswagen, Mercedes and BMW with combined sales of 76,000 through October.

The G Man

For the same reason Hyundai did not do good in Japan, Toyota will never be a big hot in Korea. The Koreans have too much pride in their country, much like the US of yester-year. Remember the good old days when your parents tells you to buy American car to support your country, well, thats the Korean's mentality right now.

AlexusAnja

I don't think it's supporting your country or not, it's a matter of if your country can produce quality vehicles. If my local manufacturer can't produce something that's worth more than used toilet paper, then why should I Mr. Joe who made my money the right way and sweated for it, have to support you X-Manufacturer just because you're "Made in my country."

The Korean and Japanese are making fine products, so for the Korean and Japanese buying a "Made Local" product is almost no brainer. Getting quality and supporting your own country.

For me, the domestics lost me back in the '80s and I've been getting fine products from Japan since. Are any domestics heading in the right direction? Definitely, I think Ford is putting out some fine products (Fusion, new Mustang 300hp V6 with 30mpg highway) but Chrysler and GM have a long way to go. One fine CTS platform does not make a revived brand.

I don't have any vehicles that currently are in need of being replaced, so the domestics have another good five years or so to win me over. When the time comes, I'm pretty sure that I'll be stepping into a domestic showroom for the first time in a very long time to cross shop. We'll see if I step out with a domestic...

spwolf

actually there are import taxes in south korea, which are now being lowered gradually as part of WTO agreements.

Blackraven

I don't if political, cultural and societal problems have an effect on this

http://en.wikipedia.org/wiki/Japan–Korea_relations
http://en.wikipedia.org/wiki/Japan–Korea_disputes

Thankfully, nowadays the hostilities aren't are extreme as in the past.

P.S.
Though yeah, there was a time (years ago) where anti-Japanese protests were being held in Mainland China and a few Japanese cars were burned and trashed by angry mobs and protesters.

LexFather

Lexus sales in Japan have taken off as well, amazing since its only been 3 years....