Hyundai Rapidly Ascending In Europe As Japanese Struggle: I30 Top Import In Germany

Paul Niedermeyer
by Paul Niedermeyer

In the eighties, the European auto makers were quaking in their boots at the prospect of a “Japanische Welle” (Japanese wave). Having seen the huge damage the Japanese brands inflicted on Detroit during the seventies and early eighties, they braced themselves for a similar onslaught. It never quite happened. Now they’re wondering if the Koreans are going to succeed where the Japanese fell short. There are plenty of indications to suggest they will. In Germany, probably the most auto-chauvinistic of all the European countries, the Golf-class Hyundai i30 (above) is currently the number one selling import car, not counting VW’s captive import brand Skoda. Toyota and Honda’s European market share is down, and Hyundai’s is up, and growing quickly. Is the Hyundai Welle unstoppable?

The Japanese did make substantial inroads in Europe during the eighties, but then it petered out. The Europeans improved quality, and the huge Diesel Welle initially caught the Japanese off guard. Toyota has established a substantial beach head, but it topped out at about 5% market share, which has recently drooped a bit to a current 4.4%. Honda has had an even more difficult time, its market share dropping from 1.7% to a current 1.3%. Honda’s Euro Chief laments: “Europe is a market we can’t run away from; it’s painful, but we have to be there”.

It’s not only a market share issue, but a profitability crunch: despite some European assembly plants, Toyota’s European ops are not profitable, exacerbated by a high yen. Honda’s undoubtedly are in worse shape. Meanwhile, Hyundai’s sales and profits are set to only improve, thanks to a recently inked Free-Trade Agreement between the EU and Korea.

This allows Hyundai to expand its European operations, including its European development center in Rüsselsheim, Germany, where over 400 engineers and designers are hard at work making Hyundais more European-flavored than ever. A new generation of diesels is being developed there, as well as Euro-specific cars, like the up-coming i40, which will be Hyundai’s European equivalent to the Sonata in the US, and a direct shot at Passat and company.

A clear indication of the i40’s intended assault on the Passat in Germany is that the wagon version (spy shot above) will appear six months before the sedan version. In Germany, wagons in the Passat class outsell sedans about two to one. The latest 1.6 and 2.0 L gas direct injection engines gas engines and diesels will power it. It will be the main weapon on the market for the non-rental “fleet” market, a huge and profitable segment for “company cars” cars that are leased for employees for three years to take advantage of tax laws.

The new ix20 MPV/micro-van (above) looks set to compete successfully against the Opel Meriva and its ilk. I was quite impressed with it and the Venga, Kia’s version, at the Paris auto show. And the new ix35 (Tucson) is selling at almost three times the rate of Hyundai’s expectations. No less than VW boss Martin Winterkorn acknowledges Hyundai’s new products: “Hyundai now knows how to build good cars”.

Kia is of course riding the same Korean Welle, growing even faster in some segments. The styling of the handsome new Optima is the fruit of having hired away Audi’s Design head Peter Schreyer. The Optima attracted big attention at the paris Auto show, including this none-too happy looking pair of German execs. Both the Hyundai and Kia stands were standouts for attracting attention from industry and press.

Hyundai has raised its European market share from 1.8% to 2.8% so far in 2010. The goal is to exceed 3% in 2011. Given their momentum, and the excellent new products set to roll out in the next year or two, including the Scirrocco-fighter Veloster (above), it seems that should be a slam dunk. The big question is whether Hyundai can keep riding their wave, or be beached like the Japanese. Surf’s up!

Paul Niedermeyer
Paul Niedermeyer

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  • Znork Znork on Oct 11, 2010

    Mmm imported all the way from the Czech Republic...

  • Ra_pro Ra_pro on Oct 14, 2010

    I have posted it many times before but here we go again. The reason Japanese cars don't sell in Europe is because in Europe style and performance combined with low fuel consumption are the most important attributes by far. The Japanese on average lag well behind in both style and performance, even gas mileage is usually a bit better in the European cars. In NA by-and-large the most important attribute for a car is to be reliable and that's made Toyota and Co the masters of the universe for the past few years. However now the Koreans are upping the ante here and in Europe; they also sell reliable cars but at a significant discount and as with the new Sonata more and more with a lot of style and decent performance. And if I were Toyota and VW and I'd be very worried. This is not a rocket science, no need to have Drs running the car companies like the Germans do.

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