First Japan, Then South Korea: The Ascent of Foreign Automakers

Japan took the American car industry by storm when it started making and selling cars in the United States. During the 1960s and ’70s, Japanese carmakers Honda and Toyota developed a reputation for quality, reliability, and efficiency and forced the American Big Three to take note. Today, South Korean Hyundai and Kia are doing the same.

In a 2007 article, AdAge summarized the history and battle between U.S. and Japanese automakers, saying,

They ignored the seriousness of the competition from their Japanese competitors for so long that by the time they woke up to the reality of what was happening, it was way too late.

The Japanese products were better, more reliable and—before their inroads into the luxury market—often cheaper than anything from the traditional Detroit automakers.

The South Korean automakers entered the U.S. market in 1986 and filled a gap that was missing at the time: value-oriented, entry-level cars. Hyundai, along with its sister company Kia, thrived in this part of the market for nearly two decades before turning an eye toward luxury vehicles.

In 2015, Fortune published an article that said,

Last week, Hyundai and Kia’s achievement was made official: Korean cars had eclipsed Japanese autos in quality. J.D. Power rated the mass-market auto brands tops for initial quality, with Kia just behind No. 1 Porsche and Hyundai, No. 4 behind Jaguar. Porsche and Jaguar are niche luxury brands.

For the sister automakers, the endorsement was sweet recognition, but it hardly shocked a global industry of competitors and analysts that had been tracking their steady improvement for a decade.

Honda and Toyota conquered the U.S. market by offering a level of quality and efficiency. Hyundai and Kia took a path to the top that focused on economy while slowly building a reputation for quality. Japan and South Korea both overcame humble automotive beginnings to become top-tier automakers. Which leaves us wondering:

Which country will give rise to the world’s next big automaker?


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