South Korea’s Hyundai-Kia group, with its ‘hungry’ dealers and showrooms brimming with new products in new segments, eased past Japan’s troubled Toyota in 2010 to take the title of Europe’s Asian sales leader for the very first time.
The two Korean car manufacturers sold a combined 620,911 units in the 31-nation EU-EFTA (European Union – European Free Trade Association) region last year, up 4.6% on 2009, according to the European automakers’ association, ACEA (not including Malta and Cyprus).
In sharp contrast, Toyota-Lexus sales dropped 16.3% from the previous year to 600,314 units. The loss of just over 117,000 unit sales reduced Toyota’s European market share by half a point, to 4.4%, according to the industry group.
Hyundai-brand sales rose 4.7% on 2009 to 358,284 units, increasing its European share slightly to 2.6% from 2.4%. Kia-brand sales rose 4.5% to 262,627 units, increasing its share to 1.9% from 1.7%.
Underscoring the two Korean brands’ rising popularity with European car buyers, their gains last year came in an overall market which was down 5.5% on 2009. Including the two Korean manufacturers, only 12 of the 37 brands tallied by ACEA posted sales increases in 2010.
Toyota’s image, which has long rested on a reputation for bullet-proof quality and reliability, was badly battered in 2010 by the recall of more than 8 million cars globally and about 2 million in Europe for safety-related fixes.
But Christoph Stuermer, lead automotive analyst for IHS Global Insight in Frankfurt, argues that Toyota’s sharp sales downturn in Europe has less to do with recall problems than with a critical shortage of new products.
Where Hyundai and Kia continue to hammer out products specifically developed and tuned for European car buyers, he says Toyota has next to nothing in its pipeline for Europe.
Simultaneously, he says, the Koreans are aggressively developing a base of young, “hungry” dealers who believe that process is far less important than volume. Toyota, he says, has “not brought its dealers along with it,” and many of its points are run-down, low-volume operations.
“Toyota is falling much faster than Hyundai is growing because of the disaster [Toyota] has incurred on the product side,” Stuermer said. “Toyota hasn’t launched any new product recently, and this year looks equally bleak. Hyundai on the other hand is constantly hammering out new Euro-specific products, attacking new segments and building up its dealers.”
Hyundai executives say they will introduce 10 new and derivative products in Europe over the next two years, including a new i40 mid-sized sedan to debut at the Geneva show in March.
Products brought to market in 2010 or introduced for 2011 include the Kia Venga and Hyundai ix20 small minivans, the Hyundai ix35 medium SUV and the redesigned Kia Sportage SUV. All are built at the group’s plants in the Czech Republic and Slovakia and were designed by the group’s separate European design centres in Ruesselsheim, Germany.
Stuermer says he expects Toyota to start ramping up its presence in Europe again over the next two years or so and more or less follow the localization philosophy of its Korean rivals.
“By 2012, they’ll probably realize again that they really want to be in Europe and will come back in a visible way,” he said. “Will it be enough to beat back Hyundai? I’m not sure, but you can’t be the world’s leading automaker and not have a significant presence in Europe.”
Source: Automotive News