Hyundai and Kia are Big Winners in Japanese Tsunami

According to Automotive News, "Hyundai Motor Co. and Kia Motors Corp., South Korea's biggest carmakers, are running full shifts at their U.S. plants with overtime, unscathed by parts shortages that are curbing local output for Japan-based competitors.

Hyundai's plant in Montgomery, Ala., aims to squeeze out 10 percent more Sonata and Elantra sedans this year than its 300,000-unit capacity, said Robert Burns, a spokesman for the factory.

About 80 miles east, Kia's plant in West Point, Georgia, has run extended weekday shifts and Saturday work since last year and expects that to continue for the foreseeable future, said Corinne Hodges, a spokeswoman for Kia.

"We've been fortunate," Burns said. "Our parts development team is closely monitoring all our suppliers, but at this point there's been no disruption."

Expanded U.S. output at Seoul-based Hyundai and affiliate Kia contrasts with assembly reductions at the North American plants of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., implemented after Japan's record earthquake on March 11.

General Motors Co. and Ford Motor Co. also cut some assembly and Chrysler Group LLC canceled overtime shifts to conserve supplies of parts that may grow scarcer.

Globally, some 1.5 million units of auto production may be temporarily lost because of damaged operations at Japan-based parts and materials suppliers, said Michael Robinet, vice president of Lexington, Mass.-based IHS Automotive."

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Adam's Commentary:

They used to say that the Nile flooded every 7 years.  It was a saying to describe the cycle of life.  And in this cycle, it seems that companies follow a growth pattern as well.  From ideas, to start-ups, to new-entrants, those with growing market share, mainstream entities, to those on the decline.  The reasons for change are many, but there's no denying that Honda and Toyota have been dealt a difficult hand with the Japanese Tsunami.  With their large market-share and dependence on Japanese parts/suppliers they feel the most impact.  The Korean manufacturers, however, are poised to gain market share at the expense of their Japanese rivals.  Their market positioning could not have been better timed.  Only time will tell how Japanese automakers respond to this threat to their marketshare; how well the Koreans capitalize on this opportunity; and what lessons all automakers will learn going forward.