Filed under: Japan, Plants/Manufacturing, Hyundai, Toyota
Toyota to suppliers: don't sell to Hyundai
The Japanese island of Kyushu has become known as "Car Island" due to the influx of not only assembly plants, but also plants run by various car parts suppliers of the Japanese domestic manufacturers. In fact, 30 percent of all suppliers shacked up on Kyushu are affiliated with Toyota.
Kyushu happens to be close to the southeastern part of South Korea where Hyundai and other automakers manufacture about 1.65 million cars per years. Hyundai is beginning to use Toyota-affiliated parts suppliers from the Kyushu region, which the Japanese juggernaut sees as a growing threat from an aggressive competitor.
Toyota gets particularly miffed when suppliers sell parts that it helped jointly develop to other companies like Hyundai. In the past it let the transgression slide for competitors such as Honda and Mitsubishi because the practice resulted in lower prices on parts for Toyota itself. Apparently Toyota's would be willing to give up the discount if it means making life a littler harder for Hyundai.
Toyota no longer sees General Motors as its biggest competition, but rather the South Korean company that could. As such, Toyota is considering asking its parts suppliers not to sell to Hyundai and may resort to raising its stake in these companies in order to force them to do so.
Thanks PassingAlong for the tip!
[Source: JinBN]
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Reader Comments (Page 1 of 2)
edgar 2:49PM (6/17/2006)
the koreans are key to stopping the japanese automobile onslaught. before world war 2 how is it that the japanese samuri never got beyond their islands? Of course the koreans kept the japanese bottled up on their island.
GM was smart in buying daewoo. It's naive to just buy japanese products. Also, buying korean benefits the US as well since Korean manufacturers pay billions in royalties.
whoever holds korea holds asia. anyone who knows the geopolitical situation there knows this. close industrial and other ties between the US and korea is in the US interest, hence we have FTA negotiations with korea going on now.
this is why toyota is fiercely intent on stopping hyundai as this article points out. hyundai is getting much better and there's no reason to buy toyota. buy American or korean (samsung, LG, hyundai, GMdaewoo, etc.)
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Steve 3:21PM (6/17/2006)
In the United States we call this collusion, price fixing and illegal. And if your a criminal they send you to jail under there Rico Act. But if you are importing to the States we ignore it. If we export doing this the WTO enacts sanctions. This Is what DuPont did with TNT in the early 1900's and we broke them up. We also did it with GM when they owned the majority of DuPont. If we keep doing nothing then we will be doing nothing.That why we call it illegal.
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risingsun 3:25PM (6/17/2006)
Prius is just an image machine for Toyota, along with the new Camry commercials.
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criao 3:58PM (6/17/2006)
nice blog...congratulations!!!
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Daddy-O 4:05PM (6/17/2006)
that is so selfish... that is why i will never ever buy a toyota... they are getting too big for their bridges... and i want no part in helping them take over the world...
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tim 4:46PM (6/17/2006)
I think the important bit of this story is that Toyota get miffed when suppliers sell jointly-developed parts to competitors.
This is about intellectual property rights. Toyota spends a hell of a lot of money on R&D and doesn't really want to see all it's hard work being shipped directly do the Koreans or maybe even more importantly the Chinese. Toyota might be able to sue Hyundai in Korea or Kia in Malaysia if their designs are pinched but good luck in China pal.
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Mal Fuller 4:47PM (6/17/2006)
Actually, in the US and most "civilized" countries, what Toyota is attempting is called restraint of trade and is illegal. Toyota's for a "free market" only as long as everybody plays by their rules!
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Source1 5:18PM (6/17/2006)
Is it possible that every post thus far has agreed that Toyota may have a blemish on its stellar reputation. I guess Toyota didn't get to us with their Demmingesque 'quality world' psycho-influence. HYUNDAI IS EXACTLY WHAT TOYOTA WAS A GENERATION AGO AND TOYOTA KNOWS IT. The only difference is that Toyota broke into N.America without someone to show them how it was done. Hyundai's path is just smart: high-quality autos for a fair price and loaded with content, grab market share at any cost and build plant after plant. Isn't this exactly what Toyota did?
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Bob Miller 5:18PM (6/17/2006)
I think it's interesting how the article points out the GM bankruptcy rumors, which are now somewhat old. Many analysts and industry experts claim that GM will be just fine.
Amazing - an industry that we taught the Japanese how to master - and now they're not even considering American companies as they're true competition anymore. Depressing.
I thought Japan was a "free market" like ours where companies were free to do business with whomever and wherever?
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Lithous 5:25PM (6/17/2006)
At this point Toyota would have to be found guilty of making their cars explode on purpose for the sole intent of killing Americans before sales of the Camry and many of their other vehicles would decline in America. So this will be meaningless just like the allegations of stealing hybrid technology and talk that their quality is going down.
The only information pertaining to bad things happening in the auto industry are from Nader, Moore and their wanabes. For some reason it is only important to these guys to speak loudly when GM or Ford screws up or does something similar to this Toyota incident.
How much do you want to bet that this incident will not sway Friedman from thinking Toyota should own GM and Toyota is so much better for our country? Toyota is no different than GM, thinking Toyota is America's sweetheart like so many do, is dangerous for America.
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Mal Fuller 5:31PM (6/17/2006)
"The only difference is that Toyota broke into N.America without someone to show them how it was done."
To the contrary, Jim Moran (the "Courtesy Man") taught Toyota everything they know about the US Market!
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Dana 5:45PM (6/17/2006)
Key point emphasized since some commenters seem to have overlooked it:
Toyota gets particularly miffed when suppliers sell parts THAT IT HELPED JOINTLY DEVELOP to other companies like Hyundai.
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Funky's Monkey 5:45PM (6/17/2006)
Japan is a free market for Japanese products. I could not wish Toyota enough bad luck, they are nothing more than a bunch of leeches. They bombarded the US in the seventies and eighties with auto's sold below cost to undermine the American auto companies, now they are after Hyundai. They have also tried to buy up all the hybrid parts manufactured in the US to keep other companies from buying them. They have even gone after suppliers of Honda in an effort to slow them down.
They are on a crusade to control the world autombile market, and don't count on the low-down elected officials in DC for any help. They are too damn busy filling their pockets, bashing gays, stopping embyronic research and trying to christianize the world to be bothered. If the voters of this country don't get their heads out of their asses, we are on our way to being a third world country.
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Jake T. 6:00PM (6/17/2006)
And what you going to do #11, just like the U.S. is always on a crusade for oil.
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Kimchee 6:00PM (6/17/2006)
"Toyota gets particularly miffed when suppliers sell parts THAT IT HELPED JOINTLY DEVELOP to other companies like Hyundai."
Only when it's not another Japanese company like Honda or Mitsu. Just Koreans.
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sam 6:03PM (6/17/2006)
finally. it's getting ugly for toyoda. knew it would happen only not quite this way. they have been dumping cars left and right not only in the us, but in most every country on the globe. they have never traded with good intent. their quality is down and slipping faster as they try to beat gm and hyundai. all i can say is i'll sit back and watch toyoda self destruct and act II, hyundai, gm, honda, and ford will pick up the pieces.
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Tom Design 6:03PM (6/17/2006)
The Japanese will destroy anyone for the sake of nationalism. Delphi, Ford, GM, Chrysler were all thrawted from distributing parts. Who will buy a U.S. car when the parts are impossible to come by? There is no U.S. auto market in Japan, though the population would be interested if the dealerships and part and service were widely competitive. The Japanese nipped that in the making, and formed chains of partnerships, where steel makers, parts suppliers, rubber manufacturers, auto companies would price only amongst themselves. They formed impenetrable alliances and no foreigner could ever survive and gain marketshare.
This is just a repitition of how they screwed the U.S.
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sp 6:07PM (6/17/2006)
dumping cars? What does it mean? selling below price, and yet Toyota is by far the most profitable manufacturer? In fact, there is no market in the world where Toyota is cheap - it is always higher priced option.
If their quality is down, why is Hyundai buying the same parts? LOL.
Why should Toyota lett other companies buy parts that are part of their own R&D?
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AR 6:17PM (6/17/2006)
You guys are a bunch of idiots. If this was GM in Toyota's place and Toyota in Hyundai's position, you'd all be rah-rah and cheering GM on. Guess what? Toyota is a business and will do whatever it takes to protect its position vis-a-vis the competition.
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Tom Design 6:50PM (6/17/2006)
AR => you're a reverse red-neck, probably ties to foreign nationals, i'd guess. It's the country's business practices we're complaining about, not Toyota or GM. It's the Japanese not playing fair in world trade, again. They have huge barriers to the U.S. marketplace. We can't even sell a grain of rice in their country, let alone auto parts. Japan doesn't practice fair trade, but they will take advantage of a barrier free country like the U.S. Are they aggressive and undermining, Yes! Should the U.S. be the same way, Yes! There should be no foreign made parts for sale in the U.S.
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