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Hyundai isn't slowing down


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Hyundai isn't slowing down



TRAVERSE CITY -- Just as Detroit's recovering car companies were starting to feel good about finally competing effectively against Japanese rivals Toyota and Honda, John Krafcik arrived in town Wednesday to give them all a whack across the head.

For all the progress that Ford, General Motors and Chrysler have made in the past year -- and they've made a lot -- Korea's Hyundai continues to set a blistering pace as the world's hottest car company.

In a speech at the annual Management Briefing Seminars, Krafcik, president of Hyundai Motor America, rattled off the intimidating specifics of the company's 10-year surge:

• In 2001, Hyundai ranked a pathetic 32nd among 37 global auto brands in J.D. Power's Initial Quality Study. Just three years later, Hyundai was seventh and it is now in the top three non-premium brands.

• In global sales, Hyundai jumped from 11th in 1999 to sixth in 2005 and to fourth by last year, trailing only Toyota, GM and Volkswagen. In the U.S., Hyundai's market share has leaped from 1% a decade ago to 5% last month.

• Barely a blip on the national scene at the start of the 21st Century, Hyundai is now a big advertiser on the Super Bowl and Oscars telecasts.

Big sales gains

Hyundai's continuing success does not diminish the accomplishments of the Detroit Three in the past two years. GM and Chrysler, with the aid of bankruptcies and federal rescues, have erased a $2,000-per-car cost gap with their chief foreign rivals. And Ford has steadily begun to rebuild sales and market share after a long slump.

In July, GM and Ford saw sales rise 5% and 3% respectively, while Toyota and Honda had 3% and 2% declines.

But Hyundai posted a 19% gain in July and its U.S. sales are up 24% this year. Not counting sales to corporate fleets and rental companies, the midsize Hyundai Sonata now ranks among the retail leaders in that segment, along with the Toyota Camry, Honda Accord, Ford Fusion, Nissan Altima and Chevrolet Malibu.

And what's more, Krafcik said in an interview, the Sonata fetched a higher average transaction price nationwide in June than the Honda Accord.

The Kmart lesson

No one knows what the future will bring, but Hyundai's rapid rise is a cautionary reminder to keep a watchful eye on the rear-view mirror.

A classic Detroit business tale in this regard is what happened to retail giant Kmart.

Remember back in the 1980s when the Troy-based discount chain was growing fast, trying to surpass Sears, which had long been the nation's top-selling retailer?

But alas, just as Kmart caught Sears in 1991, Sam Walton's juggernaut from Arkansas, Wal-Mart, blew past both of them. Kmart went bankrupt a decade later and was folded into Sears.

Hyundai is not yet a Wal-Mart-scale juggernaut, but it certainly has ambitions.



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