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:
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.