How Kia and Hyundai became cool

Once the butt of jokes, the South Korean companies are suddenly the fastest-growing automakers

South Korean cool

Reuters/Valentin Flauraud

Hyundai’s entry into the North American car market in the 1980s was an inauspicious one. Though low-priced models like the Excel and the Pony attracted frugal buyers, the South Korean company’s name quickly became synonymous with unreliable cars, and even found itself the butt of comedians’ jokes. But these days, Hyundai and its sister brand Kia have become the biggest growth stories in the automotive world—so much so that some are talking about the possibility of South Korea one day rivalling Japan’s industry clout.

“Through the first seven months of 2011, Hyundai and Kia have sold more vehicles to Americans than all European automakers combined, and are growing faster than any other automaker,” wrote Justin Hyde on the popular automotive site Jalop­nik, citing the car company’s steady improvements in quality, design and marketing savvy. Hyundai is also getting a boost from the woes of its Asian competitors, as Toyota struggles to recover from last year’s string of embarrassing recalls and Honda runs into trouble with new product launches (the 2012 Civic was left off Consumer Reports’ latest list of recommended vehicles after being named a “top pick” as recently as 2007, a distinction handed to the Hyundai Elantra this year in the small car category). The earthquake in Japan has also wreaked havoc with both companies’ supply chains. “[Hyundai and Kia] are definitely making good progress because of what’s happened to Toyota and Honda in the past couple of months,” says Jessica Caldwell, a senior analyst with industry website

The numbers tell the tale. When counted together, cars sold by Hyundai Kia Automotive Group accounted for a combined 9.9 per cent share of the U.S. market in July, compared to just 7.6 per cent for Honda and 12.3 per cent for Toyota. The two brands also replaced Toyota as the bestselling Asian nameplate in Europe this year.

The question now, Caldwell says, is whether the momentum can be maintained once rivals Honda and Toyota are back firing on all cylinders. Either way, no one is laughing anymore.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.