Ford And Hyundai Soaring, Toyota Plagued By Quality Worries?

What's going on with autos? It seems the industry's world has been turned on its head -- and quickly. The traditionally less dominant are dominating, while the traditionally strongest are stumbling. We learn today that Ford had an incredible year, while GM's bankruptcy troubles nabbed many 2009 headlines. Hyundai's performance last year was tremendous, and Toyota is in the midst of a huge, embarrassing product recall. Are we in for a new auto industry paradigm?

First, the news. Here's a blurb on Ford's impressive success, via CNN Money:

Ford Motor reported its first full-year profit since 2005 and said it expects to be profitable again in 2010.

The automaker, which has outpaced the turnaround at both its domestic and some overseas rivals, said Thursday that it earned $2.7 billion in 2009.

How big a reversal is that? This big:

Ford 2006-2009 results.gif

And Hyundai just keeps gaining market share. MarketWatch says:

Hyundai Motor Co. Thursday reported its net profit nearly quadrupled in the fourth-quarter from the year before, as improving economic conditions and tax incentives by various countries boosted vehicle sales in and outside South Korea. Net income for the quarter-ended December surged to 945.5 billion won ($814 million), according to reported figures, beating analysts' median estimate of 828.6 billion won in a Factset Research survey. Sales grew 9.3% to 9.65 trillion won.

I've written about Hyundai's recent success a few times. It's partially because consumers in this bad economy are looking for bargains, and few can beat Hyundai's prices. But its more recent push for higher quality has also alleviated many people's fears about its vehicles' dependability.

Then there's Toyota. It's recalling millions of its autos due to bad gas pedals. How widespread is this problem? The Detroit Free Press reports:

Toyota and its dealers face the daunting prospect of being unable to sell models that made up 58% of Toyota's U.S. sales last year for an unknown period of time until the company and the U.S. government agree on a way to prevent Toyota's accelerator pedals from sticking.

And I don't even need to get into GM, because everyone is familiar with its problems. Until the company is released from the government's control, people will be very wary about purchasing its vehicles.

So what does it all mean? That this is the perfect time for Ford and Hyundai to eat into the enormous market shares of GM and Toyota. And that's exactly what's already beginning to occur. I'd expect more of the same in 2010. We should see an even more competitive auto market going forward.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus


How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.


Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.


The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.


Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.


Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses


Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In