Hyundai's Rivals Better Prepare For A Bumpy Night

June 4, 2011

Sonari Glinton

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Spencer Platt
The 2012 Hyundai Veloster gets a polish on the floor of the the New York International Auto Show in April.

The big winner in the auto industry in the last few months has been the Korean automaker Hyundai. Last month, while car sales stalled, Hyundai had its biggest month ever in the U.S., selling nearly 60,000 autos. Analysts point to Hyundai's success as a sign of the increasingly competitive nature of the U.S. car market. Long gone are the days of the Big Three — now it's more like the Big Thirteen.

The car industry can be a lot like a movie. It has scenes, it has characters, and boy, does it have conflict. Right now, if the industry were a movie, it might be the 1950 classic All About Eve, where actress Bette Davis has to fend off her rival.

In the movie, Bette Davis hires a young assistant, Eve, played by Anne Baxter. By the end of the movie, Eve has learned the game and Bette Davis loses her part.

Let's pretend, for the sake of this story, that Toyota — the world's largest car company — is Bette Davis and upstart Hyundai is Eve.

Learning From Toyota

"It's a very interesting analogy," says Dave Zuchowski, head of sales for Hyundai. He says there's no doubt Hyundai has been watching and learning from Toyota — even through numerous problems with recalls and bad public relations.

"Everything we've really patterned after the way they did it," Zuchowski says. "We also stepped back when they experienced some of their problems last year and wanted to make sure we didn't end up falling into the same trap."

This year Toyota has new problems. The earthquake and tsunami have hurt its production. Meanwhile, Hyundai is running at full capacity. At its Georgia plant Hyundai is doing something it's never done before — adding a third shift. Zuchowski says it's not just that Toyota has bad luck and Hyundai has been fortunate.

"The Koreans are incredibly determined to establish themselves as a global power player," he says.

Looking at All About Eve, it's the same, says David Champion, head of auto testing for Consumer Reports. Eve "had the motivation to be that person that could take over from Bette Davis."

A Promotional Powerhouse

Champion says while Hyundai is hungry and keeps making better cars, many of the other major manufactures have gotten lazy.

"This young upstart, Hyundai, they're going, 'I want to beat Number One. I want to be there, and I'm going to do everything in my power to get there.' And that's the motivation they have," he says.

Because essentially, Hyundai wants to usurp Bette Davis. Jesse Toprak is with the automotive website TrueCar.com. He says just the like the upstart girl in the movie, Hyundai had to overcome a checkered past by using excellent marketing. Its Hyundai Assurance plan, for instance, promised to take back your car if you lost your job.

"At the end of the day I think they only had a handful of people — if that — actually return their cars," Toprak says. "But everybody talked about it. And it was just amazing promotion — and hit exactly the reason why some people may not have been buying cars, which was uncertainty."

He says Hyundai's incredible success is a sign that the U.S. car market has never been so open.

"So what that means, is from consumer's perspective it's fantastic, because you have so many choices," Toprak says. "In fact, it is so good that it is somewhat confusing as to what to choose, really. From a manufacturer's perspective, it means that the job is a little bit tougher now."

Toprak and other analysts say on any given day, almost any of the carmakers could surge ahead, so as Bette Davis would say, "Fasten your seatbelts. It's going to be a bumpy night."

And for everybody who sells cars in the U.S., dawn's a long, long way away.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

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