The Auto Writer

Yesterday, I focused on the fortunes of the US auto industry, particularly the three big automakers: GM, Ford, and Chrysler. Today, it’s all about Asia, the largest producer and consumer of automobiles in the world.

A Different Big Three

Three names stood out for much of 2009: Subaru, Kia, and Hyundai. None of these companies are among those who have been mentioned regularly in the past, and when it comes to the sales leadership of Toyota, Honda, and Nissan, only Hyundai can challenge. But all three companies have something in common: they will see a sales increase in the competitive US market over 2008, the only automakers who will finish on the plus side of the column for the year.

Subaru is not much of a surprise as this small Japanese automaker has carved out a niche for itself over the years. Unlike its larger competitors, Subaru doesn’t need to be all things to all people. The Forester, Legacy, Outback, and other models define the brand, offering an excellent build quality, very good fuel mileage, and a top resale value.

Kia is the smaller of the two largest Korean automakers, operating in the shadow of Hyundai while also being joined to its competitor at the hip. The Hyundai Kia Automotive Group has a 38% stake in Kia, enough of an ownership share to influence the brand’s direction, while allowing Kia to remain independent enough to seek its own path. This past year Kia wowed the car buying public by introducing the squarish Soul and following that up with the sedan and coup versions of its stylish Forte. A new assembly plant has opened in West Point, GA, demonstrating that Kia is committed to the US market.

Hyundai can do no wrong, a statement I would not have uttered as recently as five years ago. Okay, that sort of utterance is not entirely correct, but it does demonstrate how far Hyundai has traveled to raise quality, ensure value, and improve the brand. The centerpiece for 2009 was the Genesis sub-brand: luxury sedan and sport coupe, two models which have shown the world that Hyundai can venture into territories previously thought unlikely. And, with a new Sonata on the way and other competitive models in the mix, Hyundai’s rise looks to continue for 2010 and beyond.

Toyota Shows Imperfections

Chinks in Toyota’s armor have surfaced lately, revealing that the world’s largest automaker can screw up just like the rest of them. US sales for Toyota (as well as Honda and Nissan) are down significantly over 2008, with the company also embroiled in a very public recall involving floor mats, gas pedals, and four million Lexus and Toyota models. Toyota’s handling of the problem was abysmal with Japanese management apologetic and American PR folks defensive. It appears that Japan has since reigned in its PR people, but the damage has been done.

Honda continues to keep pace with Toyota, not so much in sales, but overall image. Not the most exciting vehicles on the road by a long stretch, Honda continues to build some of the best quality vehicles available, while passing Chrysler in US sales.

Nissan has been playing catch up to Toyota and Honda when it comes to hybrid models, but has seen more success than its competitors in winning back customers. The Cube is a fashion statement while the Altima, 370Z, and Maxima underscore that Nissan is a styling leader. Look for the EV Leaf to make headlines when it appears stateside in 2010.

Japanese Consolidation Looming?

On the down side, Isuzu no longer sells cars in North America, having exited the market in January. Two other Japanese brands – Mitsubishi and Suzuki – have been posting some of the worst year over year losses among all makes. I believe that there will be some sort of consolidation over the next few years, reducing the Japanese companies down to as few as four groups from its current eight manufacturers.

GM Daewoo’s only presence in the US market is the Chevrolet Aveo, a model not particularly endeared by the masses. Look for GM to keep one model coming from Korea in the years ahead while relying upon the Cruze and even a smaller Beat sized subcompact to bolster the B and C segments.

Finally is Mazda who seems too small to succeed on its own, but certainly is not in the category of Isuzu, Mitsubishi, and Suzuki. Still, reports that Mazda will harness Toyota hybrid technology instead of from its long time partner, Ford, appears to signal that this automaker’s future will likely be much more tied to Japan than elsewhere. Look for Peugeot and Mitsubishi to draw up a deal similar to Nissan and Renault sometime soon.

First Up: Hits, Misses For 2009: US Style

Up Next: Hits, Misses For 2009: European Style