American manufacturing has been in decline for decades. The rise of Hyundai is indicative of who has been succeeding.
For those of you who lived in the US during the 80s and 90s, you may recall the embarrassment that went along with driving the a Hyundai. If not, allow me to refresh your memory.
- How do you make a Hyundai go faster? A towtruck.
- What’s on pages 4-5 of the Hyundai owner’s manual? A bus schedule.
Even praise of the vehicle highlighted its affordability rather than quality. $5,000 was cheap, even in 1986.
A lot has changed since then. Hyundai was able to replicate the success of Japanese car makers decades earlier. When Toyota, Honda and Nissan began exporting cars to the US in large number in the post WW2 period, they too were ridiculed for being small, weak and cheap. Now, there is more or less a consensus that the Japanese make better cars than Americans. This is not to say that American consumers suddenly decided to change their minds and prefer foreign cars. Rather, the foreign cars got better, and foreign manufacturers learned a lot more about American consumer mentality.
At first glance, this might not seem significant – there was a company that wasn’t that good, and then it became good. So what? Does the Hyundai experience signify a larger trend? Yes – especially among Korean companies.
Samsung is now the largest IT company in the world in terms of revenue – not bad for a company that worked mostly in ship-building and construction a few decades ago. LG is even more similar to Hyundai in that it entered the US markets with cheap consumer electronics (remember Goldstar?) and invested heavily in R&D and marketing. On the list of largest IT companies by revenue, LG is currently just behind Intel.
This does not spell doom for the American economy. The rise of knowledge industries is real, and even Detroit has witnessed a remarkable turnaround in the past couple of years. But companies like Hyundai, as indicative of the Korean economy, will continue to emerge. Fareed Zakaria said it best when describing his book, The Post-American World, as being “not about the decline of America but rather about the rise of everyone else”.
In 2009, the Hyundai Genesis was named the North American Car of the Year at the North American International Auto Show in Detroit. Earlier this year, the Hyundai Elantra was given the same honor for 2012. It won’t be long before Hyundai joins in on the chorus of mockery directed at Chinese and Indian cars when they start entering the US market.