Even growing up in New York City barely prepares you for the sprawling metropolis that is Seoul, South Korea. Spend a few days wandering the increasingly affluent town and you'll be hard-pressed to miss the many coffee shops, seemingly at least one on every block. Seoul is a highly caffeinated city, a Seattle on overdrive, and for good reason. Its people seemingly never sleep. Workers in few countries clock more hours on the job.
"We are a driven people," suggests Hyun-Soon Lee, vice chairman of Hyundai Motor Co. And while he hesitates when I ask what it is that drives the Koreans so much, he admits that, more than anything, it is the need to show they are the equals of the Japanese, who brutally occupied the country for so much of the last century.

Straddling the Han River, the capital city has come a long way since I first visited the so-called Land of the Morning Calm more than a quarter century ago. Back then the wounds from the Korean War were readily apparent in a town that was just beginning to claw its way out of the Third World, its streets largely populated by bicycles, scooters and a small but fast-growing number of primitive Hyundai Pony sedans.

These days, Seoul is a thriving city that is climbing ever skyward, its builders nearly as busy as those in Shanghai and Beijing. And the densely packed streets are overflowing with automobiles, a surprising share of them highline products from Europe, Japan and, of course, Korea, where the country's carmakers are making a rapid push into the luxury market.



Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.


Nowhere is Korea's drive more obvious than in the auto industry. Other small nations, like Malaysia and Indonesia, have tried to build an auto industry from scratch, but few can match the growing success of the Koreans – something that's all the more significant when you consider how close the Korean car business came to collapse.

After an enviable launch, in the latter half of the 1980s, Hyundai and its rivals soon learned that Western consumers simply weren't willing to accept poorly-made products no matter how cheap the price. Unfortunately, the industry had vastly over-estimated its potential, new players like Samsung driving capacity up to an unsustainable 7 million units a year. And then the bottom fell out.

By the time the Koreans regrouped, only Hyundai survived as an independent player – with Kia acquired as its second brand. But even then, its long-term survival remained in doubt.

Not anymore. Since the economic crisis, Hyundai's share has increased almost tenfold. It's soared from 3.0% to 5.0% in just the last two years.

What's all the more impressive is that the vast majority of Americans still don't even consider Korean products when they shop for a new car, admits John Krafcik, Hyundai Motor America. "That means we have plenty of upside potential," says the ever-optimistic one-time Ford engineer.
Since the economic crisis, Hyundai's share has increased almost tenfold. It's soared from 3.0% to 5.0% in just the last two years.

There are several factors behind the Korean miracle, if you will, starting with the decision to offer an industry-best 10-year warranty. That helped to soothe consumers fears, suggests analyst Joe Phillippi, of AutoTrends Consulting. But without a significant upturn in quality the varnish wouldn't have lasted long, analysts caution. Though it may come as a shock to those buyers who still routinely ignore Korean products, Hyundai routinely exceeds Toyota in trusted indicators like the J.D. Power Initial Quality Survey.

Add great styling and a shift in focus to value versus rock-bottom pricing and the biggest of the Korean brands is on a real roll. While it's still not a threat to the Japanese leaders in the midsize segment, the Toyota Camry and Honda Accord, Hyundai can barely keep up with demand for the new Sonata, and is pushing to crank out every extra sedan it can build at its new U.S. assembly plant.

Kia, which is still struggling in the quality charts, hasn't made quite the gains of its big brother, as I realized during a recent trip to Atlanta. Spotting a middle-aged businessman getting into a 2009 Optima at a fancy restaurant I walked over to ask him about his car. "It's only a rental," he quickly offered as an excuse, as if caught with his sister at the prom.

Such responses may vanish with the upcoming launch of the 2011 Optima, arguably the most attractive new model in the midsize segment. And with former Audi design chief Peter Schreyer now in charge, expect still more high-style products to roll into Kia showrooms in the coming years.

But the real test of Korea's drive will come in the months ahead with the launch of the new Hyundai Equus. Until the launch of the brand's Genesis, the words "Hyundai" and luxury seemed as oxymoronic as "military intelligence." Then the sedan took honors as North American Car of the Year. (In full disclosure, I was one of the NACOTY judges.) But going up against a C- or E-Class Mercedes is vastly easier than challenging the likes of an S-Class or Lexus LS.

Wisely, Hyundai has set its sights low; the maker anticipates selling only a few thousand a year, at least initially. But should it come near the success of the Genesis don't be surprised to see Hyundai make an even bigger push into the luxury market, perhaps even dusting off idled plans to establish a separate, high-line franchise.
Until the launch of the brand's Genesis, the words "Hyundai" and luxury seemed as oxymoronic as "military intelligence." Then the sedan took honors as North American Car of the Year.

The Koreans remain vulnerable on a number of fronts. Quality snafus would damage them far more quickly than even the ongoing safety scandal has set Toyota back. And, of course, there's the menace from the North, their brethren in the Hermit Kingdom seemingly always ready to restart a war that never officially ended.

But "Don't believe we don't take the threat of the Koreans seriously," says a senior vice president at one of the Japanese Big Three, asking not to be quoted by name. "They're very serious and we're spending a lot of time looking over our shoulders, these days."




Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

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