Toyota in Korea vs Hyundai in Japan

In the past year, Hyundai has improved its business a lot in the global automobile industry.   From the fourth quarter of last year to the third quarter of this year, Hyundai-Kia sold around 4.5 million cars worldwide, while Toyota sold 5.46 million units in the same period.  However, the Korean automaker Hyundai could not make an impression in the Japanese car market, even though it is operating there for the last 8 years.  On the other hand, the Japanese automaker Toyota is gaining ground in Korea by challenging Hyundai-Kia on their home turf.

Last week, Korean automaker Hyundai made an official announcement about its withdrawal from the Japan automobile market.  Hyundai has maintained a low-key profile in the Japanese market for last 8 years and it could not even achieve its target of 800 cars this October.  Even though Hyundai won’t sell new cars anymore in Japan, it continue servicing its customer base in Japan.  According to Hyundai, it is better to concentrate on more up-and-coming auto markets like China, USA and India than to make investment in struggling markets like Japan.

hyundai tokyo motor show

Hyundai’s 8 years of incompetence in Japanese auto market and awkward withdrawal from Japan is certainly disappointing.  Moreover, Toyota is fast becoming one of the popular brands of imported cars in Korea.  Toyota created impression on Korean buyers through their luxury sedans marketed under the Lexus brand.  And recently, Toyota has conquered mid-priced car market section in Korea, where Hyundai-Kia, SsangYong and other Korean car makers were dominating.  Toyota recently introduced 4 new models of hybrid version of Prius and the mid-sized car Camry in Korea and could sell over 5,000 cars of the recently-released vehicles in just three weeks.

Along with Toyota, other Japanese Automakers who are quiet popular amongst the Korean drivers are Nissan and Honda.  Last year Honda sold about 12,400 cars and leading the imported auto brands in Korea whereas combining sales of Nissan and Toyota last year in Korean market was over 21,000 cars and this year it is expected to be more than previous year.

Quitting passenger car sales in Japan looks a sensible move by Hyundai.  Convincing Japanese buyers to try Korean vehicles is quiet a challenging task.  Japanese buyers have different buying habits compared to other Asians.  Japanese car buyers that buy foreign vehicles mostly prefer European brands. Although Hyundai is giving up now, it can not afford to lose this opportunity as Japan is one of the largest automobile markets in Asia.  Auto industry watchers have expectation that the Korean automaker will reform and re-enter the Japanese auto market in next 2 or 3 years.   Hyundai simply needs to revise and improve its existing strategies, learn from their past mistakes, and when the time is right re-enter Japanese auto market with a strong marketing message that promises refinement, good quality and most importantly differentiation from Japanese domestic brands.

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