Gary Rome Hyundai

An Import Ready to Haul Its Share

The U.S. car business is beginning to resemble its counterpart in Europe, where no automobile manufacturer has more than a 20 percent share of the market.

By Warren Brown
Washington Post Staff Writer
Sunday, October 15, 2006

It's a fundamental change in America's automotive landscape, long dominated by giants such as General Motors Corp., Ford Motor Co. and Chrysler Corp.

GM, still the world's largest car company, will never again have a 50 percent share of U.S. car sales. Its future footprint in America will be much smaller, as will that of Ford, assuming that Ford still has a foot on which to stand.

Chrysler Corp. no longer exists as an independent company. It is now a struggling subsidiary of German-owned DaimlerChrysler AG.

If you think all of this is prelude to a prediction of world dominance by Japan's Toyota Motor Corp., you'd better think again.

Toyota is as vulnerable to competitive pressures as are its American rivals. Anyone doubting that should take a long ride in the 2007 Hyundai Santa Fe Limited compact sport-utility vehicle. It easily runs against anything from any rival, and it does so at a price that is seductive for the most ardent pro-Japan or buy-American fan.

That kind of competition is reshaping the market in America, just as it has done in Europe, where South Korea's Hyundai Motor Co. is on a roll, taking sales from European leader Volkswagen AG and sideswiping companies such as France's Renault SA in the process.

Hyundai is one of the fastest-moving companies on the global automotive track. It wastes neither time nor money with products that sell poorly. It innovates quickly, often finding ways to develop and offer as standard equipment the same components sold as costly options by other manufacturers.

Consider the matter of safety.

Electronic stability control to help compensate for steering errors and traction control, which helps reduce wheel-spin on slippery roads, are standard on the new Santa Fe Limited. Also standard are four-wheel antilock brakes, side-impact air bags, head-curtain air bags, active whiplash-protection head restraints, and a tire-pressure monitoring system. All of this is on a vehicle with a base price of less than $26,000. Hyundai has been equally generous with standard amenities in the Santa Fe Limited. Perforated leather seating surfaces, power windows and locks, a power-heated driver's seat, cruise control, an air conditioner with automatic temperature control, a five-speed automatic transmission that also can be shifted manually, an audio system that can handle compact discs and MP3 player files, and a windshield wiper de-icer are all standard on the Santa Fe Limited, again for a base price of less than $26,000.

Of course, all of those items would be worthless baubles in a vehicle that is built poorly or that performs poorly on the road. Tough luck for Hyundai's competitors, but the new Santa Fe Limited meets or beats its rivals in those areas as well.

My vehicle-assessment assistant, Ria Manglapus, and I looked all over the tested front-wheel-drive Santa Fe Limited for any telltale signs of cost-cutting or cheap stuff Hyundai might've used to bring it to market for less than $26,000. We came up with this: The plastic steering-wheel housing is cheap. That's it.

The Santa Fe Limited, the top model in the Santa Fe line, which is sporting attractive new sheet-metal and a pleasantly reworked interior for 2007, is a quality act. As such, it really does not matter how well the Americans, Europeans or Japanese develop, design, manufacture and market their new cars and trucks. It is ludicrous to believe that a product as good as the Santa Fe Limited could enter a free and open market and not take sales from somebody.

That is what has happened in Europe.

That is what is happening in the United States.

The competition now underway in the global automotive market is brutal, merciless. It is closing factories, consolidating companies, especially in the automotive supplier industry, and costing tens of thousands of jobs. It's also producing the best cars and trucks ever.

It isn't going away. We might as well adjust to it.