Contrasting fortunes for Toyota, Hyundai across the Sea of JapanIan Rowley
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 said it had received orders for 6,600 vehicles. 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. (The figures exclude Lexus, Toyota’s luxury marque, which has been on sale in Korea for several years).
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 ends 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 isn’t enough, among Japanese car buyers that buy foreign vehicles, most prefer something European. Indeed, Ford is the only non-European carmaker that makes the top ten ranking of import marques. And while Ford ranks 10th with sales through October of 2,700, the top three of Volkswagen, Mercedes and BMW had combined sales of 76,000 during the same period.