The New York Times has an article today about Hyundai's surprising success in gaining U.S. market share. For years, the South Korean automaker was considered an inferior manufacturer. But recent strides in vehicle quality have changed that perception. This is great news for Hyundai, but pretty disastrous news for the U.S. auto companies struggling to stay afloat.

The NY Times reports:

. . . Hyundai Motor America and its affiliate, Kia Motor America, accounted for 8 percent of the new-vehicle market in the United States in August, more than Chrysler's 7.4 percent.

It's one thing to hear about the prospect that Toyota, Nissan or Honda might be outselling one of the Detroit 3. But Hyundai? And cash-for-clunkers might have been more appropriately been titled "cash-for-Hyundai." The Times also says:

The company sold more than 60,000 vehicles last month as buyers rushed to take advantage of the government's cash-for-clunkers program before its end.

The carmaker's sales topped August 2008 by 47 percent -- total industry sales were up only 1 percent.

47%! And check out the annual market share changes. Hyundai is skyrocketing up this chart from the NY Times -- note the steepness of its increase recently, versus every other automaker:

auto market shares ny times.jpg

It already looks to be overtaking Nissan. Chrysler shouldn't take much longer. Then Honda will be within reach. Clearly, the Japanese automakers have as much to worry about as those based in the U.S.

Of course, some of this could be a temporary phenomenon. We're in a recession, and Hyundai produces some of the lowest priced automobiles in the mainstream market. That probably makes their product more attractive than usual.

Still, if Americans discover that they enjoy those cars as much as their Nissans, Chryslers, Chevys or Toyotas, their experimentation with a low-priced auto during a recession could turn into a long-term love affair. With Hyundai moving up on the vehicle quality rankings, those consumers might be pleasantly surprised, causing this trend to endure.

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