By on October 9, 2010

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!

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23 Comments on “Hyundai Rapidly Ascending In Europe As Japanese Struggle: i30 Top Import In Germany...”


  • avatar
    OldandSlow

    So, Hyundai is outselling Honda in Europe.
     
    After seeing the European version of the 5 door Civic, I can see why. Maybe Honda should consider a Teutonic design center for their next make-over.

  • avatar

    Besides the constant improvements you will find with Hyundai cars over the last ten years combined with reasonable prices, Hyundai’s success in Germany might something have to do with the policy of the big locals to thin out  their dealerships.
    Especially in rural regions Hyundai might have gained exceptionally, as former VW shops now sell Far-East ware. So, why should someone there want to pay premium prices for a car just to have the additional hassle of having to drive at least twice as long to get half of the service that could and should be expected.

  • avatar
    OldandSlow

    For my conservative eyes – I like the clean lines of the Hyundai ix20 versus the current Honda Fit/Jazz and the ix30 versus the European 5 door Civic.

  • avatar
    BDB

    Volkswagens are such overrated and trouble-prone cars I’m honestly surprised this didn’t happen earlier with Japanese cars in the ’80s.

    • 0 avatar
      charly

      VW has a 20% market share. This leads to a situation  that any mechanic knows how to repair a VW and with a 20% share it is also cheap. See for an example American cars in the USA

  • avatar
    Dr Strangelove

    “Germany, probably the most auto-chauvinistic of all the  European countries”  – could that be because most European countries have little domestic car industry left?
    Hyundai market share 3% – just about where VW is in the U.S.
    “Volkswagens are such overrated and trouble-prone cars I’m honestly surprised this didn’t happen earlier with Japanese cars in the ’80s.”
    I drove a Toyota in Germany in the 80′s and regretted it. Reliable but horrible, horrible road manners.
     

  • avatar
    ClutchCarGo

    Is that Veloster just a show car or is that going into production? And if it goes into prod, any chance of it coming to the US?

  • avatar
    OldandSlow

    The ix20 has a cleaner sheet metal than the current Honda Jazz/Fit – which to my eyes seem busy.  Should they bring the ix20 to the US, it may do well in the Fiesta/Fit segment.

    The ix30/Elantra 5 door in my conservative opinion is a much cleaner design than the Euro 5 door version of the Civic. I’ve seen a couple on the road here.

  • avatar
    forraymond

    I, for one, am glad to see new companies taking the old guard to task.  VW must get their quality up, like GM.
     
    The greed and utter arrogance of VW and GM is disgusting.  They both need to take stock and build cars that will last 300K trouble free miles.  But, first, they need to have a ‘come to Jesus’ meeting with their dealerships and tell them that their behavior will change or they will lose their franchise.
     
    If they do not change, the Koreans will take their 20%, in the case of VW, and the 16% from GM.
     
    Hyundai is doing it right, style, quality, warranty – now they need to upgrade their dealerships to match their cars.

    • 0 avatar
      vento97

      >The greed and utter arrogance of VW and GM is disgusting.  They both need to take stock and build cars that will last 300K trouble free miles.

      You mean like my former 624,000 mile 1987 Golf?

      Or my 330,000 mile  daily driver 1997 Jetta?

      Every vehicle I’ve owned lasted at least 200,000 miles or more.  Like my former 250,000 mile 1975 Scirocco.  And my former 200,000 mile Datsun 280z.

      A cars longevity depends on its owner.  If the owner is mechanically inclined or has a dependable mechanic available – and consistently makes the effort to regularly maintain the vehicle, the car will last longer.  If the owner neglects even the basic maintenance items or relies on those quick-lube places (or worse yet, their dealer – whose philosophy favors volume over quality of service), the car will have a short lifespan.

      Just simple, basic, common sense (which has long since been deceased).
       

    • 0 avatar
      bd2

      Anecdotal stories about reliability don’t mean much.

      Due to VW’s poor showing in reliability not only in the US, but in Germany as well, VW owners must be a sorry lot w/ regard to upkeep and maintenance on their vehicles.

    • 0 avatar

      300k “trouble free” miles is a fairly tall order; both of these companies would do well to start by making cars that manage 100k without major problems.

  • avatar
    fredtal

    While Hyundai quality has improved it’s still average at best. I’m still thinking it’s the lower price that gets the buyers.

    • 0 avatar
      bd2

      Uhm, that’s not what JD Power and Consumer Reports say in the US, much less AutoBild in Germany (which just placed Hyundai no.1 in reliability for their 2010 rankings on reliability).

      If it was just a cheap price, then Hyundai (and Kia) should have gotten a higher market share years ago (as their prices were even lower; since then, their prices have creeped up) and automakers like Mitsubishi and Skoda, which also have lower prices, should be gaining market share just as quickly.

  • avatar
    TrailerTrash

    Where is all the talk of nations protecting their industries?

    I remember when Europe was very good at keeping its industry safe from these attacks.

    I recently purchased a new Volkl tennis racquet. To my surprise, it was made in China!
    Since when did the BIG German machine begin outsourcing to China?
    I thought their whole marketing plan was the “German” production quality.

    So I guess it always comes down to making money…and saving money.

    The consumer will smell out the best deal, eventually.
    And today’s GLOBAL/world company knows no nationality or national pride.
    It’s all about profit and nothing more.

    This is business.

    • 0 avatar
      bd2

      Keep in mind that much of the luxury goods that say “Made in Italy” are made by migrant Chinese laborers hands in Milan.

    • 0 avatar
      BDB

      I have never, ever understood when people associate “German engineering” with quality cars.
       
      Mercedes, BMW, Volkswagen, Audi, yes, they look and drive great when they’re new. But they will break down sooner than a Japanese or (at least the more recent) American cars, and when they do they’re much more expensive to fix. I know this doesn’t matter as much in the luxury segment where most people lease so it’s always under warranty, but still–why is a German brand seen as quality when they are NOT reliable vehicles? Is it a status thing, as in “I can AFFORD that $5,000 transmission repair!” or what?

      And before I get any snickering for having mentioned Detroit cars in a positive light by comparison, which would YOU feel more comfortable buying out of warranty: a 2002 Impala, or a 2002 Jetta? I rest my case.

  • avatar
    carguy

    There is no doubt that low prices are attracting European shoppers to Hyundai but there are also other factors in Hyundai’s success over rival imports. Japanese manufacturers seem to have lost their vision and direction over the last decade. Toyota, Honda and Nissan in particular seem to have lost direction in their brand philosophy, styling and technical leadership – all things that Hyundai seems to be doing right at the moment.

  • avatar
    TrailerTrash

    Help me think this out…

    WHY is Hyundai suddenly the BIG player?
    TTAC seems to have a Hyundai feature everyday.
    So a little help from the B&B…why is this happening?

    Let’s take the Sonata recently and it’s sudden burst into the top cay in its segment.
    All the talk is about what a fine car and how stunningly great a deal its turbo is.

    You tell me, honestly, HAVE you driven both the Mazda6 S and the new turbo from Hyundai?
    Which is the long term car for you?  The 6 is to me one of the more fun cars to drive.  Sort of a poor man’s BMW. But it clearly takes away some quality to give the poor guy the opportunity.
    The performance is still there.
    The quality is high for the price. It’s quiet and its solid as a rock. It drives like a slot car in the Ozark hills.

    This is supposed to be a sight where car enthusiast speaks to each other the truth.
    Then WHY, when the Hyundai keeps getting the two issues brought up in a kind of side note, its steering and its interior noise, why does its brash new motor get the headlines?
    IF performance is the key for TTAC’s B&B, why the pass on this car?

    The reason I bring this up is now the European onslaught of Hyundai.
    There MUST be something missing in their cars that allow for the economics.
    Is there something missing underneath the skin that allows for the economy in total?
    I would think all the talk of the German ride quality is for a reason…it exist.
    You can’t just not have it and then get to go to the front of the line with a nice set of clothes.

    You can dress it up all you want. However, if the guy in the suit doesn’t have what it takes, he just looks the part.

    Something is wrong here and I can feel it.
    You can’t skimp on quality and performance. and still have both.

  • avatar
    TrailerTrash

    You tell me, honestly, HAVE you driven both the Mazda6 S and the new turbo from Hyundai?
    Which is the long term car for you?  The 6 is to me one of the more fun cars to drive.  Sort of a poor man’s BMW. But it clearly takes away some quality to give the poor guy the opportunity.
    The performance is still there.
    The quality is high for the price. It’s quiet and its solid as a rock. It drives like a slot car in the Ozark hills.

    This is supposed to be a sight where car enthusiast speaks to each other the truth.
    Then WHY, when the Hyundai keeps getting the two issues brought up in a kind of side note, its steering and its interior noise, why does its brash new motor get the headlines?
    IF performance is the key for TTAC’s B&B, why the pass on this car?

    The reason I bring this up is now the European onslaught of Hyundai.
    There MUST be something missing in their cars that allow for the economics.
    Is there something missing underneath the skin that allows for the economy in total?
    I would think all the talk of the German ride quality is for a reason…it exist.
    You can’t just not have it and then get to go to the front of the line with a nice set of clothes.

    You can dress it up all you want. However, if the guy in the suit doesn’t have what it takes, he just looks the part.

  • avatar
    Znork

    Mmm imported all the way from the Czech Republic…

  • avatar
    ra_pro

    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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