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Monday, October 10, 2005


Korean Autos Following Japanese Model

As Kia replaces its US CEO, Peter Butterfield, with the former head of VW and AUDI in the US, I thought it appropriate to comment on the growth of the Korean imports in the US market. Interestingly, the Korean model follows the Japanese experience very closely.

Early Japanese forays into the US market were often ridiculed. I remember the discussion of "rustbuckets" in the 70s and "underpowered rice burners." But the Japanese weathered the storm and continuously improved at the edges of the market...where the Big Three were most vulnerable...small cars.

Same with Hyundai and now Kia. Hyundai was the punchline for many a joke when the first vehicles arrived. No one is laughing now. Both Hyundai and Kia have established themselves at the lower end of the market and are now creeping slowly into traditional "import" territory once occupied by the Japanese and Germans. Their small cars are affordable and quality has improved considerably. The dealerships are increasingly "exclusive" (meaning that dealers are investing in stand alone showrooms because they believe the brand has staying power) and sales are rising. At MotorAlley, we see strong demand in the car segment for both Kia and Hyundai models, especially in traditional import markets on the coasts.

When shopping for a new car, minivan or SUV (and soon, pickup!), it makes sense to test drive the Hyundai and Kia products. You will be pleasantly surprised. Fit and finish are competitive and quality and resale values compare nicely to the domestic and import competition. Best of all, prices are very aggressive at the 650+ Kia and Hyundai dealerships.

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