Toyota pushes into SKorea, home turf of Hyundai

By KELLY OLSEN

posted: 38 DAYS 11 HOURS AGO

Text SizeAAA

SEOUL, South Korea -Toyota is making a push into South Korea — the home market of international rival Hyundai Motor Co. — introducing four models including the Camry and Prius while downplaying the move as a direct challenge to domestic automakers.

Besides the Camry sedan, its top-selling car in the United States, and the hybrid Prius, Toyota on Tuesday announced South Korean sales of its Camry hybrid and the RAV4, a compact SUV. Japanese automakers Honda Motor Co. and Nissan Motor Co. have also entered the South Korean market in recent years.

Toyota Motor Corp. has been active in South Korea since 2000 when it established a local arm and began selling the luxury Lexus brand the following year. Now the company is offering a broader range of choices to South Korean drivers under the Toyota brand, and aims to sell 500 of those vehicles a month this year and 700 a month in 2010 through five dealerships.

The world's largest automaker competes with Hyundai in global markets. South Korea's biggest vehicle manufacturer has emerged in recent years as a formidable foe of Toyota and has seen its market share grow worldwide.

Toyota officials took pains to depict the company's bigger push into the South Korean market as anything but a challenge to dominant domestic manufacturers.

Yukitoshi Funo, executive vice president at the Toyota City, Japan-based company, told reporters that Toyota simply wants to appeal to South Korean consumers who are interested in buying a foreign car.

"We are in no way thinking to conduct business here by targeting the South Korean domestic market," he said. "We want to operate only as a maker of imported cars."

Under the Lexus brand, Toyota sold 6,065 vehicles in South Korea last year, which accounted for nearly 10 percent of the total import market.

Hyundai and its affiliate Kia Motors Corp. have expanded aggressively in recent years, building overseas plants and gaining a reputation for style and quality. Hyundai's global market share reached 5 percent in the first half of this year.

Japanese auto executives have openly expressed their admiration, saying the South Korean automaker is rapidly emerging as the most feared competitor to Japan's auto companies.

"Hyundai is awesome," Honda Chief Executive Takanobu Ito said in a recent interview with The Associated Press.

Foreign manufacturers such as Toyota have their work cut out for them in South Korea, where Hyundai and Kia have a combined market share of 81 percent. Manufacturers from the U.S., the European Union and Japan sold a total of 61,646 vehicles in South Korea in 2008, though that was up 16 percent from the year before.

Hyundai, despite its increasing global market share, has found it tough going in Japan. The Ulsan, South Korea-based company sold 496 vehicles there last year, down 59 percent from the year before.

Sales this year, however, have recovered somewhat. Hyundai sold 634 vehicles in Japan during the first nine months of 2009.

Other South Korean companies also have found the Japanese consumer market a challenge.

Samsung Electronics Co., which has emerged as a global giant in consumer electronics and has taken on and beaten Japanese rivals in places such as the United States and Europe, stopped selling consumer products in Japan in 2007, citing poor profitability.

Japan enjoys a huge trade surplus with South Korea — $32.7 billion in 2008, according to South Korean figures.

—

AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

2009-10-20 11:17:17