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Old 18th August 2010, 15:05   #1
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Default Hyundai exits Japan, Suzuki reduces U.S. dealerships

Source: Hyundai Pulls Out of Japanese Market

"Hyundai will exit the consumer vehicle market in Japan, after eight years. While unexpected, the move is not surprising considering Hyundai has only sold 15,095 vehicles in Japan since 2001. For comparison, Volkswagen sold 61,996 vehicles in 2008 alone.
The company declined to cite a reason for the lackluster sales, but Japan's automotive market is relatively small and Hyundai never overcame the stereotype of making "cheap Korean cars."
According to spokesman Oles Gadacz, "If you're not a Gucci or a BMW, there are very few who prosper there (in Japan)," He added, "Mass-market players have it very tough."
Despite exiting the consumer market, Hyundai will continue to sell commercial vehicles in the country. However, that business hasn't been terribly successful either as Hyundai has only managed to sell 43 Universe buses since 2006."

Source: Report: Struggling Suzuki cuts 50 U.S. dealers — Autoblog

"Any hopes that Suzuki might have had a year ago that the Kizashi would revive its U.S. sales prospects were quickly dashed once the car went on sale in late 2009. The attractively style Kizashi has not made any noticeable dent in the hyper-competitive mid-size segment, however, and Suzuki's sales through July are down by 48 percent compared to its already terrible first half of 2009. After peaking at 101,884 units in 2007, Suzuki has only moved 13,501 vehicles through July of this year.

As a result, Suzuki reportedly sent out buyout offers to 150 of the 354 U.S. dealers it had earlier this year and about 50 of them accepted. One of the closing dealers is Gene Butman Suzuki of Ypsilanti, MI (pictured above) which in recent months only had a handful of new Suzuki models in stock. The former Suzuki store is now peddling used cars for the adjacent Ford outlet, although the signs are still in place as of today. Suzuki agreed to cash payments for franchises as well as buying back tools, inventory and signs. By eliminated dealers, Suzuki hopes to raise per-store sales for its remaining outlets, and according to Automotive News, no further network reductions are planned."

There is something wrong with Suzuki and Hyundai here. Both Japan and U.S are highly competitive markets. In Japan, Suzuki is a major player in the small car segment, but Hyundai is a near-zero. But in U.S., Suzuki struggles while Hyundai succeeds.

Last edited by romeomidhun : 18th August 2010 at 15:10.
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Old 18th August 2010, 18:55   #2
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Yes, i noticed in the Hyundai website yesterday that they only offer the Universal series of buses in Japan. Also, the Hyundai portfolio of cars is not as advanced in Korea as it is the in the US and UK which is strange.

Also bad news for Suzuki, first the XL7 and now the Kizashi? I think both these products could work in India, provided that the right VW diesel engines can power them
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Old 18th August 2010, 19:24   #3
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I believe both are the victims of "mindset". They are both considered as makers of cheap and small cars. Hyundai in the US was able to pull off something as they were offering a 5 year warranty on their products in the late 90s and this helped them garner sales. They were the only manufacturer offering such a warranty. The reliability of the product ensured that they got repeat customers and folks who brought cars for VFM went to them. Suzuki was able to get the name in Japan but not in the US - it missed out.
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Old 18th August 2010, 19:43   #4
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Suzuki lost the plot in the US market when they introduced the hideously tacky Liana. Even the wheezy Metros were better received by US buyers. They haven't recovered since that monumental blunder of the Liana.
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Old 18th August 2010, 21:37   #5
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Its not only Hyundai,very few foriegn car makers sell in substantial numbers in Japan.Its a very closed market like South Korea,with the majority of the people going for "kie" class small cars unique only to Japan.

BUT shocking to see Kizashi not doing well in USA.I doubt now if Suzuki can make this car a success in India.They clearly cant break through the "luxury image ceiling"
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Old 19th August 2010, 10:21   #6
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thats why they both are number 1 & 2 in India.

Anyway, each market has its own dynamics, I can see Indian market allowing growth to all car companies, provided they give good product.
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Old 19th August 2010, 10:41   #7
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I'm not surprised to see anyone getting beaten up by the Japs & Germans when it comes to technology. I wonder how GM (if at all) would fare in Japan.
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Old 19th August 2010, 12:33   #8
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Hyundai did the right thing in exiting Japan. I guess they should never have gone their in the first place. The only foreign cars who can succeed there would be Luxury ones.

And Suzuki would do well to cut their losses and exit US. US market runs on brand names, and Suzuki has not got what it takes for that market. They are better off selling hatches in Asia.
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Old 19th August 2010, 17:44   #9
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I'm in Japan now so I went around asking why Hyundai had to pull out of Japan. According to my Japanese colleagues, the only cars that succeed here are the German ones and of course the Japanese ones. I can attest to that fact - I have seen a large number of VW's Mercs and BMW's here. Even American ones are seen very rarely - in the last one month, I would have probably seen 2 Ford's and none of the other American manufacturers.

My take on this is that the German connection must be something to do with time when Japan was an ally of Germany in WW2 and naturally, German autos at that time were the best compared to even Japanese ones (if any).

As for Suzuki failing in US, it is but natural - even in Japan, Suzuki is known to be a "small car" company and rarely do you see a Suzuki full size sedan here.

BTW, in the last 6 months, I have seen:

Scores of VW, Mercs and BMW,
Quite a few Jags,
One Fiat Uno and one Fiat Punto
a good number of Citreon's (surprising)
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Old 19th August 2010, 18:03   #10
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In all my 10 years in Japan, I have seen the Hyundai cars only two times. Both times as a taxi in Tokyo. Both the times, I found the rides less comfortable than the regular Toyota or the Nissan.

The reason attributed by the drivers for going for the Hyundai was the cost, almost half. But they were very dissatisfied on their decision and both were stuck with the vehicles with no one ready to buy it, even the used car dealers.

Hyundai made a good decision to get out of Japan.
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Old 19th August 2010, 22:36   #11
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Are Japanese present in South Korea? How are sales of Honda / Toyota /Nissan in South Korea? Are they present in large numbers?
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Old 19th August 2010, 23:39   #12
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Hyundai and Suzuki getting out of developed markets is not that big an impact for them financially.
For e.g. if I am starting a new departmental store, I will try starting one in the sub urban area which is untapped than doing so in the city premises. As city would have already had established players raking in profits.
Likewise while they are getting good share in the developing markets they are not bothered if the developed market gamble dint pay off.

But a counter point would be, Hyundai is one of the players whose share has increased hugely during the current recession in US. And Suzuki is might have opted out as VW would have not found much synergy in building Suzuki again.
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Old 20th August 2010, 01:26   #13
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Originally Posted by pgsagar View Post
Are Japanese present in South Korea? How are sales of Honda / Toyota /Nissan in South Korea? Are they present in large numbers?
South Korea market is dominated by domestic brands>I think almost 90% of the market is shared between Hyundai,Kia,GM Daewoo and Renault Samsung.
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Old 6th November 2012, 07:34   #14
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Default Re: Hyundai exits Japan, Suzuki reduces U.S. dealerships

End of the road for Suzuki in the US at least for its automobiles?

American Suzuki Motor Corp. says it will file for Chapter 11 bankruptcy protection and cease selling automobiles in the U.S. as part of a plan to restructure its business.
Source: http://www.nytimes.com/aponline/2012...y.html?hp&_r=0

The declining sales numbers says it all.

As a result of its lack of focus on the long-term, Suzuki has been losing sales and dealerships at a rapid rate over the last few years. Suzuki's sales tumbled from 101,884 in units in 2007 to just under 25,000 in 2010. The automaker's sales recovered slightly to 26,618 units in 2011, but Suzuki's sales are down 2 percent so far in 2012.
Source: http://www.leftlanenews.com/suzuki-c...s-dealers.html

Last edited by samarjitdhar : 6th November 2012 at 07:46. Reason: Added sales figures
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Old 6th November 2012, 09:35   #15
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Default Re: Hyundai exits Japan, Suzuki reduces U.S. dealerships

Just a couple of small pointers.

Hyundai is also perceived in the UK and Australia as a real VFM car seeker's vehicle of choice.

There is no brand value to speak of because most car buyers tend to wrinkle their noses and look a bit down on these brands there.

However reliable they are, they are still perceived as "cheap cars for the not-so-well-off joe" and are most definitely NOT aspirational by any stretch of the imagination.

The dynamics are so different here in India - we got to see the Suzuki and Hyundai brands when we were straight off the experiences with ancient, antediluvian Ambassadors and Fiats - in that relative sense, Suzuki and Hyundai were from an alien planet at the time. The timing of their respective entries into India was absolutely right and hence, they have been able to become very successful mass market brands.

It is all relative in the end...
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