Car industry taking notice of South Korea's quiet campaign

Once little more than industry punchlines, the likes of Kia and Hyundai got tired of the jokes, and it shows.

Japan has long been the source for well-built, affordable vehicles, but the Koreans are proving to be stiff competition, most recently with the stunning Hyundai Genesis Coupé. Courtesy Hyundai
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You need only see the previous generation of Kia's Sportage SUV on the road, and compare it with the latest model, to know that something is happening to the cars of South Korea; something very good, indeed.

With both Kia and Hyundai now producing ranges of cars that are modern, nice looking and really well built, the Japanese manufacturers that have always been the default option for people looking for quality automobiles on a realistic budget suddenly seem a bit old hat.

Who saw this coming? Not me, that's for sure.

My awakening came a couple of years ago, while I was still living in the United Kingdom. A sleek red sports coupé rumbled past me and I had no idea what it was. I was pretty sure I recognised the badge on its bonnet, though, but there was no way on earth that what I'd just seen was a Hyundai.

Getting home, I set about searching for this mysterious car on the internet and, sure enough, what I'd seen was a Genesis Coupé. And the reason I hadn't seen one before is that, quite inexplicably, the model isn't available in Britain.

The previous Hyundai Coupés had been really, really unattractive things, but the Genesis I saw got me thinking. If the company could make something that gorgeous to behold, surely some sort of turning point had been reached.

As US rap stars were busy poking fun at Hyundai drivers while extolling the virtues of whatever Bentley or Aston they were using as personal transportation, the South Korean underdog had been quietly going about the business of reinventing itself. And it made me smile seeing that car, because it proved I could still be surprised by something with four wheels and an engine.

It's in stark contrast to the feeling I had when, in the mid-1980s, I saw my first Hyundai. It was owned by a teacher at my school and it actually made me laugh out loud. Looking like it had been designed by accident, in the dark, the Pony was a mess and told the world, or at least my fellow students and his colleagues, that Mr Jones didn't have the first clue about cars. Yes, it was brand new but it was embarrassing.

Hyundai was just starting to break into the UK marketplace at the time, but a 66hp car developed by the person responsible for the horrible Morris Marina was never going to get tongues wagging for the right reasons.

Do you lie awake at night dreaming of a bland box on wheels that takes 16 seconds to reach 100kph? No, but Hyundai did at least offer the opportunity to own a new car for about the same price as a bag of chips, so it became a bit of a hit in cash-strapped northern towns, which were reeling from the UK government's coal mining industry obliteration.

At around the same time, another South Korean car company began to make itself known: Kia. And there were other Korean names coming into the fray (not necessarily car manufacturers), like Samsung, LG, and tyre companies like Hankook and Kumho.

Suddenly the mysterious Koreans were making a name for themselves with cheap but quality goods, providing cost effective alternatives to the establishment.

Both Hyundai and Kia continued to steadily improve their vehicles but there was always the feeling that, if you bought one, you were buying into old technology. Kia's Pride, for instance, was outwardly recognisable as the old Mazda 121 city car - which in itself was never really noteworthy - and, as such the old clichéd remarks were wheeled out time and again. If you bought Korean, you didn't have enough money for something Japanese, never mind European. A social stigma was attached and it looked as though it would never be shaken.

Skoda knows a thing or two about this. No matter how good its cars have become over the years (and they are very good, indeed), there's something wrong with the badge, the name and, hence, the image. Your car is viewed by many as an outward display, a reflection of who you are as an individual; and what others think of your choices in life does matter for most of us. How could Hyundai and Kia get over this hurdle and turn around their fortunes, so they were respected as manufacturers of desirable products, rather than bargain basement fodder?

It was quite simple, really. The two played to their strengths and continued to expand their ranges, appealing to those buyers on strict budgets, and all the while making significant improvements to build quality, reliability and design. Kia did bite off more than it could chew, though, getting too big too soon and, when the Asian economy went through a crisis in 1998, the company went bust. Hyundai seized upon an opportunity and bought Kia, no doubt intending to be the biggest car manufacturer in the world, but that idea was to be short-lived.

The merger was ruled as illegal under South Korea's strict monopoly laws and the government ordered Hyundai to be broken up. Hyundai Motor Group became a separate entity, headed up by Chung Mong-Koo, the son of the company's founder, and Kia became a subsidiary manufacturer, benefiting from cross-sharing platforms just as Volkswagen Group's output has for many years.

Practically every market niche has been plundered by Hyundai and Kia, from city runabouts to sports cars and SUVs, as well as hybrid and electric vehicles. Even the luxury segment has been catered for, with the big Genesis saloon, which took the fight to Lexus and Infiniti. Buoyed on by cheap labour rates and their ability to undercut their rivals when it came to price, but without sacrificing quality for quantity, it's little wonder that the world in general has forgotten about the early days of either company.

But Hyundai and Kia are not the only car companies to emerge from South Korea. Both Daewoo and SsangYong have risen over the years, although they're still some way off replicating the runaway success stories of the two main players. And that's likely to have more to do with design than build quality.

By 2006, Kia had identified design as its "core future growth engine" and, in that year, hired Peter Schreyer as its chief design officer. Schreyer had excellent previous form, having designed the Audi TT, and he'd been on the receiving end of some major design awards. This approach had worked (and continues to work) for Jaguar, who hired Ian Callum as its design chief. The technology under the cars' skins hasn't really advanced much since but, crucially, the design language has given the company a much-needed shot in the arm. Within a year of the XF going on sale, for instance, the average age of a Jaguar buyer had gone down by 10 years. Kia and Hyundai would end up doing exactly the same thing.

An onslaught of new models over the past few years has resulted in a sea change in our attitudes to these companies. Hyundai has been in the headlines in recent times for poaching the former BMW designer, Chris Chapman, to head its design centre in Irvine, California, so the relentless unveiling of cutting-edge shapes appears to have no end in sight. But there's much more to both than funky looks that easily outshine offerings from Toyota, Honda and Nissan. They're actually extremely good to drive, too.

I'll own up now and admit that the first time I ever even sat in a Hyundai was last year. I'd attended the regional launch of the new Azera in Beirut and frankly had been bowled over by the way that car behaved on some extremely challenging roads. The quality of construction was, even on the pre-production models I drove, superb, and the only thing I could find to criticise was the heavy-handed design cues to its interior. For the money, there was practically nothing to touch it and I'm glad to say it has been a deserved success.

My next Hyundai experience was the new Genesis Coupé. More aggressive looking than the model I initially noticed back in the UK, it nevertheless retains most of the design elements that made it a winner in the first place. With bags of grunt from its 3.8L V6, it felt truly alive in my hands, always willing to kick out its rear with the merest provocation before the electronics saved the day. The sense of relief felt that the driving experience matched its looks was palpable and, again, I found myself nitpicking to identify any flaws. These basically boiled down to a lack of head room (rather than leg room) for rear passengers and annoying design details like the two fake air vents in the bonnet and some questionable interior appointments. The torque reserve meter, in particular, smacked of teenagers' fantasy dials gone mad.

But these are mere minor grumbles. The Sonata tested by a colleague was so good that he was seriously tempted to spend his own money on one and other friends of mine who own new Kias have said they wouldn't think about going to anyone else in the future. They're that good.

Would I spend my own money on one, though? Actually yes, I would, and I'm not alone in this. In the Middle East, Hyundai racked up 161,554 sales in the first half of this year - an increase of 13 per cent over the same period last year - and demand appears to be still increasing. The Japanese seem to be floundering in the wake of two South Korean car companies that, just a few years ago, were the laughing stock of the motoring world. But with models on offer that now appeal to the crucial youth market, they've tapped into a rich seam of automotive gold, and winning a great many awards from the worldwide motoring press has done no harm, either.

Just a few days ago, The National reported that the French government had asked the European Union to keep Hyundai "under surveillance, accusing it of dumping on the French market", so it isn't only the Japanese car companies feeling the pinch due to Hyundai's and Kia's irresistability.

Is it game over for Toyota, Honda and Nissan? Not exactly, but in these times of worldwide economic hardship, the fact that you can drive a car that looks cool and isn't a financial headache to run might be enough to sway you when it comes to buying your next one. It's time for the Japanese companies to stop resting on their collective laurels and reassess their approach to the one thing we all notice first: what a car looks like.