Volkswagen Loses All Respect For Japanese Auto Makers. Or So They Say

Bertel Schmitt
by Bertel Schmitt

Two news items are unnerving Japan today: The ruling DPJ party seems to be heading towards a solid defeat at the upper house elections. And Volkswagen has lost all respect for the Japanese competition. The enemy Volkswagen now fears most is – dou shiyou

Korea.

“I have the most respect for Hyundai,” said Volkswagen’s Martin Winterkorn to Germany’s Focus Magazin. The Korean currency is low (as opposed to the Japanese …) and quality is high. “Hyundai now knows how to build good cars,” said Winterkorn.

That immediately alerted The Nikkei [sub] that headlines “Volkswagen Sees Korean Car Makers Bigger Rivals As Japanese.”

A few days ago, Korea attracted the attention of Volkswagen’s grand seigneur, the octogenarian honorary chairman Carl Hahn , who warned in an interview given to Korean Times that “Korea is in a position to have an aggressive price policy, which obviously won’t be possible in the long run.”

Japan is – how shall we say it – a bit ambivalent towards Korea. If the doitsujin think that the Koreans are worthier opponents, then this is indeed cause for alarm.

Or maybe VW is just making a strategic retreat from their Strategie 2018. Unseating Toyota by 2018? Nicht mehr nötig! Keeping those verdammte Koreaner in check is what counts now!

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Mdensch Mdensch on Jul 11, 2010

    It's just possible that Dr. Winterkorn was doing some strategic thinking aloud. VW may be starting to see that it could realize its goal of market domination by marching in place while Toyota's market share is steadily eroded by both its own continuing missteps and the growing strength of the Koreans nipping at its heals.

  • Tstag Tstag on Jul 11, 2010

    Forget the Koreans and the Japanese. It's the Chinese everyone should fear. They have over 100 auto makers surely a few of them will succeed. And look at the likes of Cherry and SAIC to see the quality is getting better. Also their strategy's are crafty MG and Volvo are now both Chinese. Brands that we in the West know and like. Take the new MG 6 for example. Not a Ford Focus beater just yet but getting very close in engineering terms anyway. And before anyone mention's safety, check the MG range out, all boxes are ticked. Sure Korea looks good right now. But give it 5 years....

    • See 1 previous
    • Rgil627il Rgil627il on Jun 25, 2012

      off yourself please.

  • Ra_pro Ra_pro on Jul 11, 2010

    I have said it many times but if you look at the electronics industry as a car business proxy you will see that Chinese are nowhere as a major brand-name electronic producers even after 30 years. Sure they produce shiploads of gadgets but mainly as cheap "no-name" stuff (not necessarily bad but certainly not leading edge) or as producers for major Japanese brands. In the meantime Samsung is quickly taking over Sony as the leading electronics producer. They already have the best HD TVs and the rest will follow. Hyundai is Samsung of the biz. Sharp is the inventor of LCD tv and only a few years ago they were still the technology leader in the field. Now despite the fact that they have the most modern TV factory built in Japan they are so far behind Samsung in design and technology that I don't see how they can ever catch up.

    • See 1 previous
    • Bertel Schmitt Bertel Schmitt on Jul 12, 2010

      Some are suffering from myopia. The Chinese know the value of brands, but there is very little knowledge of creating brands. 50 years of communism has some impact. Give the Chinese some time, and they will learn. They are the quickest learners I have seen. The Koreans weren't the brightest when it came to branding (remember Lucky Goldstar?) but they learned. Japan has a rich culture of branding, but even they had to go through the "Technics", "National" and "Panasonic" phase. Every big American advertising agency has at least one office in China, and they are doing their darnest to teach the Chinese branding. Did I mention that they are quick learners? Arrogance and underestimating your competition are deadly sins.

  • Wsn Wsn on Jul 12, 2010

    VW's poor performance in NA (2% market share), has nothing to do with the Japanese, or Koreans or Americans. It's themselves ...

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