Hyundai Struggling to Up Sales in Japan
TOKYO October 24, 2005; Kim So-hyun writing for the Korea Hearald reported that while Hyundai Motor Co. is enjoying rising demand in China, India and an improving reputation in North America and Europe, it is still a nobody in neighboring Japan.
Hyundai, which aims to become one of the world's six largest carmakers by 2010, recently announced aggressive marketing plans to more than double its sales here in two years.
"We aim to sell 10,000 cars in the two years to 2007 in Japan," Kim Jae-il, a Hyundai overseas sales executive said at the media preview of the Tokyo Motor Show last week.
Hoping to reach that goal, Hyundai plans to launch the new Grandeur large sedan, a hit model at home, in January, and to increase maintenance service shops across Japan to 230 by the end of this year.
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| Hyundai Motor presents the NEOS-3 concept car at the Tokyo Motor Show. [Hyundai Motor Co.] |
The number of visitors to Hyundai's dealership in Tokyo more than tripled as a result of the new commercial, according to Park Sang-joo of Hyundai Motor Japan Co.
"Women in their 40s and 50s would come with their husbands to take a look at the car," Park said. Increased interest towards the car led to sales of more than 700 Sonatas so far.
However, despite such positive signs, most Japanese are not familiar with Hyundai cars, said an official surnamed Tanigawa at the Japan Automobile Importers Association.
Considering that some 30 foreign car marques struggled to sell a little more than 240,000 cars last year, of which more than half came from three leading makers - Volkswagen, Mercedes-Benz and BMW - Hyundai's sales target might sound too ambitious.
"The Japanese are very brand-oriented people. They buy expensive imported cars because they want luxury and expect their cars to represent some status. Brand image is very important here. Hyundai cars are of good quality but Japanese consumers are not aware of this," Tanigawa said.
Hyundai competes mostly against Japanese cars abroad, but competition with 12 local brands on their home turf is difficult even for more well-known foreign marques.
Japanese automakers control more than 95 percent of the domestic market which amounts to between 5 million and 6 million units per year.
The world's second largest auto market is notorious among foreign carmakers for its consumers' diverse demands and local manufacturers' dominance. Toyota Motor Corp., Japan's largest automaker, sells some 60 different models in its domestic market while selling only half of that in the United States, the world's largest auto market.
Having entered the Japanese market in 2001, Hyundai sold slightly over 10,000 cars here so far.
This year, 1,768 Hyundai cars including the Click compact, Tucson and Santa Fe sport-utility vehicles, Avante XD, Tuscani sports coupe were sold in the nine months to September, down 15 percent from a year ago.
In August, Hyundai appointed a former executive of Japanese units under GM, BMW and Mercedes-Benz as the new chief executive of its local arm. The new CEO said earlier that he plans to sell 800 Sonatas this year and 1,500 units next year. He also said he will increase the number of its dealerships from the current 60 to more than 100 in three years.
(sophie@heraldm.com)
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