Japan losing its manufacturing edge to South Korea
“I got the feeling that Korea’s Hyundai is clearly surging past Japanese models,” automotive journalist Toshifumi Watanabe tells Shukan Bunshun (Jan 26), after returning home from the Detroit Motor Show. “I was particularly struck by their innovative and challenging designs. Japanese automakers, by contrast, are content to introduce their new ideas using concept car prototypes. That’s a stance that makes them vulnerable.”
It was about 30 years ago that U.S. politicians swung sledge hammers on Japan-built cars that appeared to threaten their domestic auto industry. This year, however, it was Hyundai’s compact Elantra that took the honors as “North American Car of the Year.”
“Among the three finalists in the passenger car category, there wasn’t a single Japanese model,” sighs an editor of an automotive magazine. “Since 2000, every year there was at least one, and sometimes even two models nominated. Since 2009, the Nissan Leaf electric vehicle was the only one to be picked.”
How the mighty have fallen. In previous years, Japanese models had been selected in the passenger car and light truck categories, the latter of which includes SUVs. And in 2006, Honda Motor Co drove off with double prizes, taking two categories. But since 2009, when Hyundai won its first prize, the appeal of Japanese models has declined.
“By 2000, Hyundai had already passed Mitsubishi and Suzuki, and over the past five or six years has become a real competitor,” says a journalist who covers the auto industry. “Now their Elantra and Sonata models are contending with Toyota’s Corolla and Camry. In terms of price, I get the feeling the Korean cars are ranked above their own class. And Korean car designers are also working for European and American firms, which recognize their flair for design.”
Pros in the industry still give Japanese models the nod for more robust stability, quieter operation and superior finish. But in terms of design and price, Korean brands are giving them a run for the money—and the latter’s 10-year warranty service has made them particularly appealing.
Meanwhile U.S.-built hybrid models like the Ford Fusion, with its claimed 42 kilometers to the liter fuel consumption, are mounting a strong challenge to another Japanese specialty, hybrid vehicles. In comparison, the Toyota Prius claims 37 kilometers to the liter.
Shukan Bunshun moves on to lament Japan’s rapidly plummeting TV industry. It seems the inflated value of the yen is not the only threat to its continued existence.
At the Consumer Electronics show held recently in Las Vegas, two Korean companies—Samsung and Lucky Goldstar, both introduced 55-inch organic EL TVs. In 2007, Japan’s Sony had previously launched sales of an 11-inch model with similar electro-luminescence, considered by some to be the next-generation technology to succeed LCDs.
Sony also had hopes that organic EL technology would lead to a resurgence of its brand.
“Our efforts to master the manufacturing technology failed, and our yield rate was poor, wrecking efforts to reduce production costs,” then-president Ryoji Chubachi had announced. “We also failed to develop large-screen technology. So Sony effectively decided to withdraw from organic EL TVs.”
“Other Japanese firms made efforts to develop the technology, but any way they worked it, the results showed they would incur major losses, so their management gave up trying,” a business reporter tells the magazine, adding “But Samsung pulled it off. They might lose money, but they’ve got the desire, and the financial resources, to persist. If they manage to boost the yield rate and achieve profitability, they will take another bite out of Japan.”
“In the past, it was Japan’s TV makers that drove foreign manufacturers out of business,” observes Osamu Katayama, a business journalist. “Call it karma, but now it seems to be time for them to receive the same treatment at the hands of South Korea.”