SEOUL - A total boycott by foreign carmakers due to the small exhibition space offered them, at what they deemed an exorbitant price, leaves the Seoul Motor Show '99 with just three domestic auto manufacturer exhibits. Such a small showing of cars is almost unheard of in today's world of global automakers. But the market in Korea is anything but normal.
In reality, there are just two Korean auto manufacturers, thanks to auto industry consolidations in the last year. But while Ssangyong Motor Co. Ltd. has been entirely absorbed by Daewoo Motor Co. Ltd., Kia Motors Corp. remains distinctly separate from its new parent, Hyundai Motor Co. Ltd.
Neophyte Samsung Motors Inc., meanwhile, is in limbo, with production halted until a government-arranged swap by Samsung Group for Daewoo Group's electronic subsidiary is completed.
Seoul Motor Show '99 is the first auto show here since 1997 and only the third ever. Organizers insist that lack of floor space caused by construction snafus led to the dispute with the importers, and that the issue will be resolved in time for the next Seoul Motor Show in 2001. They also say they tried to talk importers individually into exhibiting, but the foreign companies maintained a united front and stayed away.
Still, the mood, overall, among the Korean automakers at the show was more upbeat than many overseas visitors anticipated, as domestic car sales have improved more than expected so far this year. Each manufacturer now hopes to end up selling more cars than it originally forecast for 1999. The industry projected a 15% increase over 1998 figures; now it is aiming for a 20% increase, says Duck-Young Chung, executive vice-chairman of the Korea Automobile Manufacturers Assn. Korean domestic sales rose a booming 46.7% in the first four months over year-ago levels. Exports soared 53% during the same period to 386,261.
Hyundai was clearly the dominant exhibitor at the Seoul show, with about half the main hall devoted to its models. Kia and Daewoo shared the other half. SUV and minivan concept vehicles were the most popular, with no less than nine making their debut. The only one to be seen before was the Hyundai Santa Fe sport/utility vehicle, which was introduced at the Detroit auto show in January.
>From an export point of view, the most significant new production car is >the 2000 Hyundai Tiburon. The sports car goes on sale in Korea immediately >and will be exported to the U.S. and other overseas markets later this >year. The new model has more aggressive styling than its predecessor, with >four small projector headlights and a slight increase in power. Although >Hyundai's top-of-the-line Equus luxury sedan went on sale in April, it was >seen for the first time by many attending the show. Equus is powered by >Mitsubishi's 4.5L V-8 GDI engine, which is the first-ever application for >this innovative engine.
Among the concept vehicles, Hyundai showed the Trajet, a European-style minivan with four regular hinged doors, which is close to production. The vehicle is powered by a 2.5L engine, with 4-wheel-drive (4WD). The company's Tirol concept SUV has a slightly less aggressive look than the Santa Fe. Ironically, it has a FF-type full-time 4WD system, whereas the Santa Fe is a front-drive SUV.
Kia displayed the Genesis, a futuristic hybrid minivan/SUV with a large gull-wing door on each side. The Carens, a hybrid car/minivan, was the most significant new production vehicle.
Kim Soo-Joong, Kia's president, says the automaker is aiming to expand its annual sales performance to 1.3 million units by 2003. He says the company is firmly committed to producing 800,000 units this year, up a substantial 69% from 1998. Of this, a half million units will be targeted for export. Although Hyundai has taken over Kia, the company intends to maintain the Kia name and develop the two brands separately. Hyundai plans to cut costs by consolidating R&D facilities and cutting back on the number of platforms.
Daewoo had few new vehicles on display, although pride of place was taken by the attractive looking Mirae concept car developed at Daewoo's R&D center in England, which now has 900 employees.
After having survived the tough economic crisis of the last year and the International Monetary Fund-imposed economic restructuring, Korea's two surviving auto manufacturers appear to have gained renewed confidence in their ability to compete in the marketplace, even as they gain independence from their respective chaebols (parent groups).
Hyundai now says it wants to be among the world's five biggest car companies. Kang Byung-Ho, president of Daewoo, says Daewoo is committed to becoming one of the top 10 car companies in the world. He also says that the company continues to work with General Motors Corp. on their parts joint venture and will have "something concrete to talk about in the future" on an expanded relationship with GM. Most analysts, however, say a tie-up between the two at this point appears highly unlikely.
