Korean automakers have managed to increase their share of the US market amid a painful recession thanks to a winning combination of marketing, pricing and solid products, analysts have said.
Go deeper with GlobalData
Once small players with a reputation for poor quality, Hyundai and Kia have been steadily increasing their share for many years, news agency AFP noted.
In the nine months since US auto sales collapsed in October amidst the credit crunch and financial market meltdown they have nearly doubled their share even as their total sales numbers have fallen.
Hyundai’s share of the US market has grown from 2.5% in October to 4.4% in June while Kia’s share rose from 1.8% to 3.1%, AFP said, citing Autodata.
Hyundai and Kia now sell more vehicles than Volkswagen, BMW and Mercedes yet do not offer anything in the US pickup truck segment, which accounts for one of every six vehicles sold there, and is hotly contested by the Detroit and Japan-owned automakers the Koreans still trail.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIt could be hard for competitors to win back that lost share because Hyundai and Kia have posted significantly smaller drops in sales, Alan Baum, of forecasting firm the Planning Edge, told AFP.
Sales by GM, Toyota, Ford, Honda, Chrysler and Nissan all fell between 32 and 45% in the first half of 2009.
Hyundai’s sales were down only 10.8% while affiliate Kia’s were off 5.9%, the report said.
“They’ve obviously done better and they’ve picked up new segments and their quality has improved,” Baum said. “They’ve also developed a strong marketing approach.”
AFP noted Hyundai made headlines early in the downturn with a programme which promised to cover most costs if people were forced to return their cars because they lost their job.
A new incentive this week offers new car buyers a year’s worth of cut-rate US$1.49 a gallon petrol by reimbursing them for the cost of a different price at the pump.
“They have clearly decided to keep the pressure on incentives,” said AutoPacific analyst Stephanie Brinley.
“But they’re also getting some pretty good buzz with their new products such as the Genesis and the Soul, which is helping sales.”
“Soul continues to exceed our initial sales expectations and has attracted new customers to our showrooms,” said Kia’s US marketing chief Michael Sprague.
Hyundai also won the top spot amongst non-premium nameplates and fourth overall in a recent JD Power survey, ranking ahead of VW, Audi, Scion, Volvo, Subaru and Jeep.
“The Koreans also have dealt head on with the quality issues that dogged them,” JD Power research head Dave Sargent told AFP.
Kia sales chief Thomas Loveless said in a recent interview that the Forte and Soul were both designed and marketed to take away sales from established Japanese brands such as Toyota and Honda. “We see them as competition for Toyota and Honda,” he said.
The one drawback for the Koreans is the very crowded nature of the US market, Baum told the news agency.
“Everybody has to fight for every scrap of market share,” he said.
Top Toyota dislodges champion Chevy
