VW's greatest fear isn't Toyota, it's Hyundai

INSIDE EUROPE BLOG
Paul McVeigh, Automotive News Europe

PAUL MCVEIGH

Volkswagen is just as concerned about what's in its rear-view mirror as what
is ahead in its quest to become the world's biggest automaker. The German
giant, which aims to topple Toyota from its No. 1 spot, sees Korea's
Hyundai-Kia group as a bigger rival than the struggling Japanese company."I
have the most respect for Hyundai," VW CEO Martin Winterkorn told the German
news magazine Focus, naming Hyundai's improved quality and the weakness of
the Korean currency as reasons why Hyundai is on his mind. "Hyundai has now
learned how to build good cars," added Winterkorn.His comments didn't
surprise industry watchers."He's right," said Stefan Bratzel, who heads an
automotive research center at the Bergisch Gladbach University of Applied
Sciences in Germany. "Hyundai has enjoyed enormous growth in sales and
profitability in recent years. Toyota should not be forgotten but Hyundai is
a very serious rival."Bratzel said Hyundai is strong in Asia, especially in
India where it is the No. 2 automaker after Suzuki with a 16 percent market
share, and in China, where the Korean company is enjoying fast growth.IHS
Automotive auto analyst Ian Fletcher said Hyundai and Kia can now match
Japanese automakers for quality. "They are not just building cheap cars.
They are building cheap, good cars," he said.Hyundai has boosted sales in
North America with innovative sales methods, Fletcher said, and its new
Sonata sedan is doing well in the United States against Toyota's Camry and
Honda's Accord.In Europe, the Korean automaker benefited enormously from
government scrappage incentives, which many consumers used to buy cheap,
small cars such as the Hyundai i10."The only thing that lets them down is
their brand image. Hyundai is not yet established as a respectable brand,"
Fletcher said.Respectability could become less of a problem for Hyundai
following Winterkorn's comments.

 

Wouldn't doubt it...I owned 1 VW my whole life and it was the biggest
piece of crap I ever had the mispleasure of owning. (fully loaded 1997
VW Jetta) Just off the top of my head, things I remember....the 1st 2
years off the lot: 3 times drivers power window (2x motor, 1 time
switch) 2 radios replaced, pass heated seat repaired....entire exhaust
from cat back replaced at 32K miles because it rotted out (a my expense
since it was not covered..only 24K warranty). When they pulled the
exhaust off, there was a big VW logo on the muffler with a "made in
Mexico" right under it. The whole car was made in Mexico. There were a
number of other minor things too...The last straw was a major
though...the brake master cyl. started leaking at 42300 miles. I
brought it in and would not cover it. Traded it in for a 99 F-150
Lariat, which I still have to this day...120K miles and it was in 2
times to the dealer. Once for the lighted outside mirrors and once for
the cruise control recall, both at no cost to me. Just regular
maintainance...

I know some will say, well a REAL VW made in Germany would never do
that. Well, it's their reputation, their logo they're sticking on it,
and it's supposed to be to the same quality. A poor rep is hard to
overcome...I'm a good example - I'll never buy another...

 

Toyota is more worried about Hyundai in other markets around the world where
it must compete. Don't forget vehicle pricing is market bases and the
lower costs in Korea gives the Korean manufactures a big advantage. As to
VW, the cost of building in the socialists countries is much high than in
the US or Japan. They way the current administration is building
unsustainable debt will make build costs for all industries in the US to
skyrocket over the next ten years.

 

As we move more and more to a service economy more manufacturing will be
"offshore" and not in the U.S. It's unfortunate that the "current"
administration is responsible for all this debt, but that is a topic
best left to another group.

 

Then why did you post it here?

 

Because I wanted to.

 

Debt responsibility is such a tricky thing. A slippery slope. One
administration inherits a multiplicity of problems from a past
administration and all of a sudden the current administration is
responsible of everything? And problems it took the past administration
eight years to create should be fixed by the current administration in a
year or two? Oh, but you're correct, this is a topic that is best not
posted to three alt.auto groups. Hmmmm. Interesting concept.

 

Offering a service, maybe?