When Japanese automakers entered the U.S. market, they changed the very fabric of the American auto industry. The cars they offered were small, inexpensive and quickly built a reputation for reliability that exists to this day.
Toyota, Honda and Nissan happily took market share away from the U.S. automakers and never looked back.
Today though, the Japanese are forced to glance backwards because South Korean automaker Hyundai is storming forward and steadily taking customers away; just as Japanese companies did to the U.S. automakers.
The irony comes full circle with this quote from Honda CEO Takanobu Ito:
Hyundai is awesome. They are undoubtedly a threat because their products are cheap, and the quality is improving.
To say Hyundai’s quality is “improving” is like saying the Pittsburgh Steelers are Super Bowl contenders. Hyundai isn’t improving, the company has improved to the point where I believe it could build a better Honda than Honda does.
Toyota’s chief even went so far as to say that his company is “grasping for salvation” and is in the final stages of corporate decline.
While that may be a bit of an exaggeration, Nissan’s senior vice-president Shiro Nakamura compared the whole situation to food by saying,
We have to offer the equivalents of sushi, tempura and kaiseki to compete against Korean barbecue.
I think what he was trying say, in a really weird way, is that Japanese automakers need to find a way to make sure consumers see the value in paying more for Japanese cars. I’m not sure that’s a winning proposition, as this Great Recession will only motivate more buyers to look for long-term value and reliability.
That’s an equation Hyundai has a very firm grasp on.
Will Hyundai continue its rise and overcome Japanese automakers? I think Mazda and Nissan are more at-risk than Toyota or Honda, but what do you think?