Ford And Hyundai Soaring, Toyota Plagued By Quality Worries?

More

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.

Jump to comments
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.
Get Today's Top Stories in Your Inbox (preview)

A Fascinating Short Film About the Multiverse

If life is a series of infinite possibilities, what does it mean to be alive?


Elsewhere on the web

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

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In