Hyundai is falling behind its Japanese and Western rivals

THE OFFICES of the Asan car suppliers’ union resemble a bygone era. Walls are decorated with fading photographs of past protests. Cigarette smoke wafts from the foyer, where workers in overalls lounge on battered sofas enjoying a break between shifts. Most are well into middle age. Do Sung-dae, the union’s boss—shock of grey hair, horn-rimmed glasses, waistcoat heavy with pins supporting various causes—is locked in a struggle with Yoosung Enterprise, a parts-maker that employs its members in Asan, an industrial city south of the capital, Seoul.

Korean parts-producers are being squeezed. More have filed for bankruptcy protection since last autumn than at any time since the financial crisis in 2008. Plenty, including Yoosung, claim they are fighting for survival. Their troubles are a symptom of a deepening crisis in the industry. At the industry’s centre is a single giant firm: Hyundai Motor.

In 20 years Hyundai Motor (which also controls Kia) went from being barely known to the world’s fifth-biggest carmaker by churning out decent if unexciting cars that were cheaper than similar ones produced by Japanese or Western competitors. Like Asan’s union offices, however, it has failed to keep up with the times.

Hyundai’s global sales were stagnant at 96.8trn won ($85bn) last year. Net profit declined in 2018 for the...

via Business Feeds

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