By on August 10, 2010

Does anyone remember when Hyundai set foot on U.S. soil? “KKK” (as in Korean Krap Kar) was one of the funnier monikers they received. Does anyone remember when Hyundai announced plans to become one of the top five automakers in the world? Rimshot. Cost-to-coast laugh track. Fast forward to the real world, and – oooops: Hyundai’s quality and reliability is now being thought of in the same vein as Toyota and Honda, Hyundai’s Alabama plant can’t make their cars fast enough and Hyundai was recently labelled the most fuel efficient automaker in the United States. It’s a long cry from the days of the Hyundai Pony, which was a load of old pony. Well guess what? Hyundai just broke another corporate milestone.

Auto Loan Daily reports Hyundai has broken into  Kelley Blue Book’s Top Five Most Considered  Automotive Brands, kicking out Nissan. The top five (in case you’re interested) goes like this:1. Ford 29%

2. Toyota 22%

3. Chevrolet 21%

4. Honda 20%

5. Hyundai 13%

Ford at the top is hardly surprising, given their recent run. Toyota at number 2 IS surprising. If I were to believe the media, Toyota is in their death-throes and that TTAC should crank up the “Toyota Death Watch” series. However, the recalls did have some damage as Toyota lost eight percentage points. Just goes to show you, you should never let a good witch hunt go to waste. Chevrolet at number three isn’t a big shock and neither is Honda at number four.

The promotion of Hyundai to number five represents an increase of nearly 6 percentage points over the past quarter. “The latest Kelley Blue Book Market Intelligence findings show how the deck is being reshuffled in the automotive marketplace, with certain brands now holding places in consumer perception that we may not have believed just one or two years ago,” said James Bell, executive market analyst for Kelley Blue Book’s kbb.com, “Ford continues its upward trajectory and Hyundai is truly on a roll. Both brands prove that when you make dynamic, exciting and affordable products that appeal to the new-car shopping masses, consumer perception begins to change and subsequently, sales will follow.” Should I mention the higher fleet sales? Better not, let’s try to leave a positive spin on this!

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41 Comments on “Consider This: Hyundai...”


  • avatar
    JMII

    As I said a few days back in the “get ’em while their hot” thread:

    My wife finally admitted this weekend that given the choices out there she would take a new Genesis Coupe tomorrow if she “had to buy new”. We were once die-hard Honda fans but nothing they make now captures our interest since they have NO sporty cars and everything else has been beaten with an ugly stick.

  • avatar
    gslippy

    The survey results make sense, since Hyundai/Kia is very close to #5 in overall sales in the US. Only they and Subaru increased during 2009’s carmageddon.

  • avatar
    Dynamic88

    The thing about Hyundai is that their new found success isn’t due to PR, it’s due to them actually improving their cars.

    Our business schools might do well to make a case study of Hyundai.

    • 0 avatar
      rockit

      Actually your wrong. It’s mostly the new media. Hyundai is currently the media favorite at the moment. And with the internet news travels so much faster than say..20 years ago.

      The Japanese (Mostly Honda, Toyota) earned their quality reps from cars over decades, cars with high mileage and great quality…not not initial quality reports from fanboys on the internet.

      I personally have not seen a Hyundai vehicle pass 150,000kms in good condition.

      However, Hyundai has made huge improvements in the last couple of years.

    • 0 avatar
      don1967

      It’s mostly the new media.

      As opposed to the old media, which agreed with you?

    • 0 avatar
      rockit

      “As opposed to the old media, which agreed with you?”

      This has nothing to do with what agrees with me. I am pointing out facts.

      The new media (mostly the internet) has bloggers, armchair CEO’s, fanboy’s, fansites, and of course actual news.

      So yes news travels much more faster than ever before, but that doesn’t make the quality of the information any better.

    • 0 avatar
      Silvy_nonsense

      “I am pointing out facts.”

      No, you aren’t. You are stating your opinion. You need support your position by making reference to mainstream media sources that refer to actual data that has been gathered by credible sources. You aren’t a credible source. You seem like a good guy, but you’re not an acknowledged auto industry expert, media expert or journalist. Like me, you’re just some dude with a keyboard and an Internet access account.

      I enjoyed reading your opinions in this post and think they are interesting, but please stop confusing your opinion with fact.

    • 0 avatar
      bd2

      @rockit

      Uhh, Hyundai wouldn’t be the “media favorite” if it didn’t have the product to back that up (and frankly, I’d say that Ford is just as much, if not more so the media favorite these days).

      As for reliability, Hyundai has been ABOVE average for a decade, and firmly ahead of such Japanese brands such as Nissan, Mazda and Mitsu.

  • avatar
    mrcrispy

    Hyundai are actually improving their cars, they have the best tech, best performance and the best looks (interior and exterior) in their segment. The quality is as good as the Japs and the warranty is much longer. All for a lower price. What’s not to like? Anyone who buys a Toyota crapbox over a Hyundai is an idiot.

    • 0 avatar
      rockit

      Read my above post.

      `Hyundai styling has improved but is just rip offs from other makes (it is very debatable if its good or not)

      `Quality is not as good, that has not been determined yet

      `The Hyundai warranty actually covers less components then other makes and is not transferable to second owners. It simply draws people in with the 10 year promise.

    • 0 avatar
      Silvy_nonsense

      @rockit

      “Quality is not as good, that has not been determined yet”

      Your statement in only partially correct. Consumer Reports, the gold standard for unbiased information about consumer products says “Hyundai and Kia continue to make reliable cars. The Hyundai Elantra and Tucson, and the Kia Sportage got top marks.”

      The Japanese brands currently offer a greater number of reliable choices, however it has been determined pretty clearly that Hyundai products continue to improve and some of their products equal or exceed the quality of their Japanese equivalents based on Consumer Reports data.

      It should be noted that based on average reliability at a brand level, Hyundai is eighth behind seven Japanese brands, and Hyundai outscores every domestic and European marque currently on sale in America. Hyundai clearly has a handle on quality.

      Judgments about beauty are always subjective, but that being said, I like the exterior designs of many of the Hyundais currently on sale. I think many of them are great to look at. Kudos to the appearance of the exterior styling of certain Kias, too.

      References: http://www.consumerreports.org/cro/cars/new-cars/cr-recommended/best-worst-in-car-reliability-1005/reliability-findings/reliability-findings.htm [No Subscription Required]

      http://www.consumerreports.org/cro/cars/new-cars/cr-recommended/best-worst-in-car-reliability-1005/how-makes-compare/0407_how-makes-compare.htm [Subscription Required]

    • 0 avatar
      bd2

      @rockit

      You’re like a skippin’ record, and one that skips over relevant facts.

      1st off, Hyundai’s reliability has been rated as being better than all other major, mainstream import brands other than Toyota and Honda over the past 4-5 years (JD Power and Consumer Reports).

      2nd, AutoBild, which probably does the most COMPREHENSIVE analysis of reliability in the indudstry just rated Hyundai the TOP brand (granted, the German market has a diff. mix of vehicles).

      3rd, Hyundai gets BETTER CSI scores for repairs covered under warranty than Toyota, Honda or Nissan (JD Power).

      4th, for 2nd hand buyers who are interested in the 100K drivetrain warranty, all they need to do is to buy a CPO vehicle (and why wouldn’t limit the 100K warranty for initial buyers? It’s smart business which results in more new car or CPO sales).

      5th, Honda probably has borrowed more design cues than Hyundai lately (heck, even Mercedes is doing it) – but none of them have cloned a vehicle like what Lexus did w/ the LS430.

    • 0 avatar

      @rockit – The new Sonata is really not all that derivative of anything, and is probably the most adventurous in the class of boring family sedans. The Genesis Coupe is also not terribly derivative.

      Now the Genesis sedan? They should have given it the Sonata’s good looks.

      As for Hyundai’s quality – they are willing to back up their improved quality with a good warranty. Something that GM is too scared to do. Sure there are limits, but some people actually buy their cars to own them and don’t serially trade them every 5 years.

  • avatar
    beken

    My buddy bought a Hyundai Pony (we’re in Canada) in 1985 and drove it for 12 years. It was rusted and bruised and all else. But it was still in working condition when he finally traded it in. He did not buy another Hyundai.

    In 1991, I test drove an Elantra. Turning a corner, plastic interior trim fell off the car. The salesperson still tried to sell me the great car I was driving. I did not buy it. But I had friends who bought Hyundais. Hyundai offered a 10 year bumper to bumper warranty as well as free maintenance. However, booking an appointment to get anything fixed left you stranded for two months before your appointment came up. I guess that was the wake-up call for Hyundai to improve their quality.

    I’m pretty amazed how far Hyundai has come and how nice their cars are looking.

  • avatar
    Geo. Levecque

    Hyundai still have some quality issues like the lady in Toronto who has a 2010 Santa Fe. she is one her third transmission, waiting for a new one to arrive in Toronto from Korea, in the mean time she does not have a vehicle to drive!
    Hyundai build great Sea going Ships, some of the largest in the World, its no wonder they can control costs by playing with the currency, I still don’t think they are up to either Honda or Toyota in over all quality!

    • 0 avatar
      gslippy

      Generally speaking, you may be correct. My only Honda data point was an 05 Odyssey that ended up in lemon law court, having broken in the driveway with 26 miles on the odometer. It was a horrible car for the next 20 months I owned it, and the dealer was worse.

      There are similar stories for every mfr. But evidently Hyundai has reached a sweet (enough) spot for quality and price that is appealing to many people.

    • 0 avatar
      Norma

      “Hyundai build great Sea going Ships”
      Eh, do you include the one at the bottom of the Gulf of Mexico owned by Transocean?

  • avatar
    HerrKaLeun

    If a car is good you see after 5+ years. If it is popular you see when you sell it after 5+ years. I really would want to see how a 5 year old Hyundai compares to a Toyonda? Especially since the Hyundai warranty is not transferable.

    Maybe we could request a list to compare depreciation of 5 year old cars? but not only in % (since that gives more expensive cars an advantage since losing 30% on a $ 100,0000 car is more expensive than losing 30% on a $ 15,000 car).

    I think they will be considered good in 5-10 years when you see many 15+ year old Hyundais driving around. that is what makes everyone think toyonda build good cars: there are plenty of 15+ year old Honda and Toyota that are driving well with proper maintenance. No such Hyundai yet. And this is what makes people think buying a used cars is worthwhile and lowers depreciation.

    • 0 avatar

      You’re exactly right. Objectively, Hyundai is probably building cars of the same quality as Toyota and Honda (and Ford) but public perception has yet to catch up. Here’s hoping it does.

    • 0 avatar
      gslippy

      In the last 12 months I’ve bought an 01 Elantra (138k miles then), and an 09 Sedona (18k miles then).

      The Elantra – after some initial repairs – has been a very good runner.

      The original 10/100 warranty on the Sedona reverted to 5/60 for me as a second owner. I do most of my own repairs, try to keep cars as long as possible, and only financed it for 4 years, so I’m not too worried about the 5+ year stuff, not to mention resale value.

      The used Sedona price beat the used competition price by several thousand dollars, making it very attractive as a used car to me. This is true of Dodge, also, but I’ve been there and done that (twice) with Chrysler minivans and decided it was time to move on.

    • 0 avatar
      HerrKaLeun

      good for you to get a good price on the 09 Sedona… but that indicates large depreciation. In this case to your advantage. But for the new-car buyer it is bad.

      I also try to keep my cars for a long time. But the average for people is about 3-4 years. There are life-changing situations (with kids, you need more space etc.) and older cars may cause problems. So there is a valid reason to have to sell a car within or before 5 years. And most people don’t fix their own car… so depreciation/repair expenses are a real consideration when buying a new car.

    • 0 avatar
      gslippy

      You are correct on the resale issue. If I planned to change cars every 3-5 years, I’d hesitate on Hyundai from that standpoint.

    • 0 avatar
      HerrKaLeun

      The thing is, I always plan to keep the car until it falls apart… but life is full of surprises. If I knew the future 5 years ahead, I didn’t need to worry about resale value since I’d be a stock trader :-)

      My wife probably wants a new car faster than I do. I hope to get her on a 4-5 year schedule and then take her old car when she wants a new one. That way the cars stay 8-9 years in the family. It also goes along with changes int eh industry. When I buy a new car i want significantly better equipment (i.e. airbags etc.) things that the old car didn’t have. When I think of my 5 year old Mazda 3, the only thing a brand new Mazda 3 really has in addition is VSC. I’m not buying a new car because of one single feature added. In 5 years I’m sure hybrid, start-stop, direct injection etc. will be standard. then it is a worthwhile step to upgrade. Not before.

      Maybe being older now (and not moving between continents anymore) will help me sticking to cars longer.

      But even if I could plan out my life, counting on keeping a car for 10 years is risky. I’d rather take the car that easily sells in 5 years if I need to.

    • 0 avatar
      don1967

      I received an impressive 42% residual on my 5-year Santa Fe lease a couple of years ago. It absolutely blew Honda, Toyota and everybody else out of the water.

      While this is clearly a factory incentive in disguise, let us remember that Hyundai has been pretty smart in doling out incentives recently. The job-loss marketing gimmick, for example, was paired with a gas-price-cap gimmick… a near-perfect hedge in which only one incentive was likely to cost the company any money. And in hindsight, neither incentive cost them much. Who’s to say that the resale value incentive won’t prove equally smart?

    • 0 avatar
      bd2

      While Hyundai has been improving its quality/reliability over the years, Toyotsa’s quality/reliability has slipped since its heyday during the 1980s-90s.

      One simply cannot base the quality/reliability of a new Toyota today based on Toyotas made 15-20 years ago.

      Even on Toyota sites, they lament the increase in recalls and the decrease in the quality of the build and materials (for instance, the interior/dash of the Camry once was near the top of the class; currently, it’s middling at best).

  • avatar
    jkross22

    To see Chevy on this is list staggering to me.

  • avatar
    seanx37

    It is not a secret how Hyundai succeeded. Make cars people want. Well built attractive cars. It isn’t that hard. Yes, Chrysler I am looking in your direction.

  • avatar
    tparkit

    Speaking from my personal perspective, the best thing about Hundai’s multi-segment success it that perhaps it will kick fat, lazy, navalgazing Honda square in the backside, so that maybe those beancounting, insular bums will once again build a car I’d consider buying.

  • avatar
    don1967

    I remember test driving the original, rear-wheel-drive Hyundai Pony when it first came to Canada in the 1980s. It was such a third-world piece of crap that, for the next 20 years, I sneered at Hyundais from the seat of my various Hondas and Nissans. But today I drive a Santa Fe, and am unlikely to return to Japan Inc. anytime soon.

    To Toyota’s credit, it acknowledged the Hyundai threat years ago, while most of us were still sneering. It did not sleepwalk its way over a cliff like GM did.

    Hyundai Deniers need to remember that people laughed at the first wheel, the first horseless carriage, and the first Toyota. If there’s one thing we should have learned by now, it is that the auto industry is one ego-bruising paradigm shift after another.

  • avatar
    ComfortablyNumb

    “Should I mention the higher fleet sales?”

    You could, but you should also mention that YTD Ford sold more to fleets than Hyundai’s entire volume. But wait, that might make Ford look favorable. Yeah, you better just leave that out.

  • avatar
    vvk

    What, no SAAB?! :-)

  • avatar
    rmwill

    Consider these points:

    1. For all the chatter about how “I am buying a Genesis coupe/sedan” precious few have fiund owners.

    2. The 10 year warranty is gimmickry. 2 local dealers require customers to charge warranty parts to their credit card in case Hyundai denies the warranty clam.

    3. Hyundai powertrains are not competitive with the top in the industry.

    4. Seeing torn down examples after durability testing shows that they are getting better but durability issues with plastic bits and interior componentry are still issues.

    5. Aftermarket parts are not as available, and out of warranty repairs on components like ac compressors are very pricey.

    All that said, the Sonata is a very nice, if over styled car.

    • 0 avatar
      rockit

      +1

    • 0 avatar
      bd2

      Consider this…

      The Genesis sedan is the THIRD best-selling RWD mid-size import sedan for 2009 – outselling the Lexus GS, Infiniti M and the Audi A6 by a 2:1 or greater margin (in its 3rd year of sale, the Genesis sedan is still outselling the new M).

      Hyundai rates HIGHER than the Japanese Big 3 on consumer satisfaction for repairs under warranty according to JD Power’s CSI Report.

      Autobild, aside from getting consumer feedback and looking at repair histories/records – also actually tears apart vehicles in order to do their own inspections. Funny how Hyundai still managed to be top ranked.

      Saying that Hyundai’s powertrains (the news ones) aren’t competitive is simply laughable.

      Anyhow, as I’ve been predicting, Hyundai’s brand image should be about on par w/ Toyota and Honda by the time their new lineup has been on the dealer lots for a few years.

      Probably more impressive will be the rise of Kia’s reputation – by the time their new lineup is complete and ready for a refresh, they will likely be seen on par w/ Nissan.

  • avatar
    brettc

    We owned a 2001 Accent for 2 years and it soured me on Hyundai. We traded it at 40000 miles on a 2003 Jetta TDI because of 3 transmission control module failures in a short period of time. As a result, we were left stranded each time until the tow truck showed up. I’m glad they’ve supposedly improved quality more though. As it is, I’ll stick with my VWs since they’ve been more reliable than the Accent. Maybe in a few years I’ll seriously consider a Hyundai if they’re making something desirable.

    • 0 avatar
      bumpy ii

      Yeah, those autotragic control modules have a reputation for being buggy. The Korean electronics industry still had some work to do 10 years ago. I ended up replacing the TPS and IAV on my 2000 Accent when they started acting up around 120k.

      Trading for a Jetta? Frying pan –> fire?

  • avatar

    I’m not surprised at this turn. We had a Sonata rental last year for a New England vacation. Was very pleasantly surprised by it. Hyundai is on our buy list now.

  • avatar
    thornmark

    According to “Strategic Vision” the Genesis is preferred over usta-be or faux luxury brands like Lincoln:

    American luxury car drivers prefer Hyundai
    http://www.theautochannel.com/news/2010/08/09/491203.html

    http://www.finchannel.com/news_flash/Oil_%26_Auto/69080_Hyundai_Genesis_Leads_Near_Luxury_Car_Segment_in_Strategic_Vision%27s_2010_Total_Quality_Index/

    http://www.cargurus.com/blog/2010/08/09/what%E2%80%99s-happened-to-american-luxury-cars#more-18677

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