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Hyundais have finally become more expensive than Toyotas in the U.S. market. The U.S. retail price of the 1,600 cc Hyundai Accent, known as the Verna in Korea, is US$12,565, $640 more than its rival Toyota Yaris. The direct cause is the 9 percent appreciation of the won against the dollar, which dropped from W1,008 in January to the current W922. As a result, Hyundai Motor¡¯s sales in the U.S. market have declined for the fifth month in a row after peaking at 47,000 units in July. They plummeted to 28,000 units last month, a drop of no less than 15 percent compared to the same period last year. During the same period, Toyota¡¯s sales rose 15.9 percent and GM¡¯s 5.8 percent. Hyundai Motor¡¯s market share in the U.S. dropped from around 3 percent last year to 2.4 percent this year. If the trend continues, the share will hit around 1 percent before long. Beyond that waits complete disappearance from the U.S. market.
There are only two survival techniques in the car market: outstanding quality or low price. If the price of a car is high but the quality similar to its rivals, it doesn't sell. If a poor-quality car costs more than its rivals, it disappears. That is the market rule. Hyundai¡¯s weapon had been a lower price among cars of similar quality. That advantage has gone because of the strong won, so Hyundais are disappearing from the U.S. market.
But even in the face of that threat, the Hyundai Motor Union striked no fewer than 13 times this year. Only one of these strikes, over a pay rise in July, had anything to do with working conditions at the firm. The remaining 12 walkouts came at the behest of the Korean Confederation of Trade Unions over such things as opposing legislation on a labor relations roadmap, blocking a free trade agreement between Korea and the U.S. and opposing legislation on irregular workers. Because of the strikes, Hyundai Motor fell 115,124 units worth W15.6 trillion (US$1=W923) behind schedule.
The world car industry is a graveyard of once-great brands. Nissan, Rolls-Royce, Chrysler, Fiat, Jaguar, Land Rover, Volvo and Saab have all either been sold abroad or are breathing their last. Some economic analysts are even betting when GM and Ford will close down. The Hyundai Motor Union is hastening Hyundai Motor¡¯s interment in the car graveyard. For how many winters thereafter will union members have to sleep rough in our streets?
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