I ask the question, because their cars sell at a big discount. Among the manufacturers of cars, they seem to be recording big sales increases, and they offer excellent warranties (10 year, 100,000 miles). Is there any evidence that they are buying market share, by underpricing their cars?
I remember the days when Hyundais were shoddily built, cheap econoboxes…this is not the case anymore (some people claim they offer Japanese levels of quality).
Plus, they seem to manufacture quite a few cars in the USA-are they losing money on their US operations?
Can’t speak for Kia, but CBS Sunday Morning did a piece on Hyundai this morning. They pointed out that US car sales are down by 21%, but Hyundai’s is up by 8%.
Kia is a wholly-owned subsidiary of Hyundai Kia Automotive Group.
Hyundai, Kia Profits Soar to Record Levels
ralph, that one took me approximately 10 seconds, with 30 seconds of copy and paste to find. It took me longer to write this than it did to look it up. Google really is your friend for questions like these. I only mention this because you post a lot of these types of questions, and the answer is only a few keystrokes away.
Of course, I can Google…so can anybody.
What I am looking for is somebody with intimate/inside info.
Otherwise, I wouldn’t bother with the SDMB.
As a general rule, I would think that people with inside info on a company wouldn’t post that to a message board. It’s a really bad idea for one’s career.
Most cars these days last to the 100 000 miles, so it is not usually a big loss to do repairs to the cars they make parts for.
You can make lots of money on some repairs. Car stereos are hard to replace. A Honda radio would have cost me 600 plus labor. Just a one disc player.
The 10 year/100,000mile warranty also appears limited to powertrain rather than bumper to bumper.
Don’t tell anyone, but the “profits” are nothing more than fancy accounting tricks.
Sell! Sell!
From what I understand, a lot of the carmakers have realized that warranty claims on major drivetrain components actually decrease as mileages get higher. All the manufacturing defects work themselves out early in the car’s life and so there’s really not that much risk in extending the warranty. (Or, alternate theory, they can more often get away with blaming drivetrain failures on the customer after a certain number of miles. Either way, the claim rate goes down as the cars get older).
So, yes, high-mileage warranties are something of a gimmick and don’t cut into a car maker’s bottom line much. (of course Hyundai’s 100,000 mile warranty doesn’t even register on the gimmick-o-meter compared to Chrysler’s lifetime powertrain warranty).
I think Hyundai is in the position that the Japanese companies were in 20-25 years ago. By selling only a few models, none of which are very fancy or technically ambitious, they’re able to focus more on build quality and reliablity while still keeping the prices low (even with a profit margin!).
I get the impression that the Korean car makers are buying market share; in much the same way that the Japanese did in the 1960’s did.
Of course, they have dramatically increased the quality-I hear that many korean cars are as good as the japanese.
Of course, there are exceptions (the late lamented Daewoos were pretty bad).
That’s because few people replace their radio with another new factory radio. They either get a better stereo for far less money from an electronics store, or they get a radio from the junkyard if they don’t care much about the sound.
And car stereos are pretty easy to replace, usually - just pick up a single or double DIN head unit or an appropriate spacer and you’re good to go.
One other thing to mention is that Hyundai (& Kia) own or control many of their parts suppliers in ways that would probably bring the attention of US anti-trust authorities if these companies were headquartered in the US (I’m talking about Mando and Mobis, among others). These suppliers also supply parts to other automakers.
Simple vertical integration wouldn’t cause antitrust issues by itself.
Yes, Hyundai is profitable.
Many publicly traded companies make their audited financial statements available on their website. The financial information section of the Hyundai Investor Relations site is here.
20 years ago, I would have laughed at Hyundai. 10 years ago I looked at them, but just couldn’t fathom buying one.
Last month, I sat in the Hyundai Genesis, and I want want badly. That’s a niiiice car, at any price (but especially at that price).
Good on them. They kept plugging away at the market, doing little things along the way, and now they’re no longer a joke. Probably doesn’t hurt them all that much that the “traditional” car companies like Toyota and GM keep stepping in it. You want to get snobby about a BMW, knock yourself out, but snobby about a Chevy or even a Toyota? This isn’t 1974 anymore, you have to search far and wide to find a factory-produced automobile that is truly awful (or heck, even mediocre).
We’ll be looking to buy a car in the next year or two, and we’re very attracted to a Hyundai Elantra wagon. I’ve been studying J.D. Power & Associates ratings on dependability and am very impressed with Hyundai’s marks. They seem to be equal to or barely below Honda, yet their prices are considerably lower.
We drove a rental Hyundai for a week or two while our Mazda 6 was being repaired, and I thought it drove and handled well, too.
I hope their prices continue low until the time we buy. Otherwise, we’re going to be looking at the Honda Crosstour.
The available 100K warranty we got wasn’t all that much extra with our new Sonata, and EveryThing is covered. + We love the car.
I have had a Hyundai Elantra for the past 4 years. It hasn’t had one problem. I am completely satisfied with it.
This is my understanding - I got into a discussion at the Auto Show with a Hyundai rep - basically I asked “Why are these so much cheaper, but with comparable engines, etc.”
The rep explained that Hyundai owns most of the goods used to produce the cars, from the steel production to the factories that make the seat covers, so they are able to cut expenses way lower than other companies that have to hire it out.
ETA: they are great cars, BTW. My hubby’s had a used one for years that still runs great.