While Skoda and Dacia are showing the car industry the way to build low-cost cars in eastern Europe, South Korea is Asia’s leading light in value car brands.
Hyundai Motor and its sister carmaker Kia are growing faster than most of their competitors by offering aggressively priced cars that – much like Skoda’s – are making advances in features and quality.
General Motors’ Chevrolet value brand has its main global production hub in Korea, building cars at plants once operated by the bankrupt producer Daewoo. Chevrolet was one of the main drivers of GM’s record sales in 2011.
Some of the Koreans’ competitors complain that their success is due partly to a manipulated exchange rate. South Korea’s free-trade agreements with the US and the European Union, they say, offer Hyundai and Kia’s cars open access in the west, while non-tariff barriers block their own exports.
Whether or not that is so, cars such as Hyundai’s new Veloster small car and Kia’s Sportage sport utility vehicle are winning arguably good reviews and legions of new customers who like their quality and design. The brands’ sales saw double-digit growth around the world last year – even in western Europe, where the overall car market fell.
While the carmakers offer their vehicles at competitive prices, both are working on improving their image. Hyundai last year relaunched its brand under the slogan “modern premium”, meant to denote the notion of offering top-end features usually seen in premium cars to the mass market.
In the US, Hyundai’s cars now have some of the industry’s best resale values, alongside Toyota’s.
The brand, which had a reputation for patchy quality when it first began exporting cars in the 1980s, has in recent years launched its own luxury models, the Equus and Genesis.
Unlike Toyota, which uses separate dealership chains for its premium Lexus brand, Hyundai sells the cars in its own dealerships, alongside its mass-market models.
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