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| June 27, 2000 | atimes.com | ||
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The Koreas
Hyundai, DaimlerChrysler tie shakes up auto world SEOUL - With Hyundai and DaimlerChrysler forging a strategic alliance on Monday, a powerful lineup has come into existence, foretelling drastic change for the Korean as well as the world's auto industry. Earlier in this year, DaimlerChrysler acquired a 33 percent interest in Mitsubishi Motor and now the three allies are poised to become the world's biggest joint auto manufacturing and supply network in the near future. The Hyundai-DaimlerChrysler alliance is also expected to put more weight behind the two's joint bid for ailing Daewoo Motor. For Hyundai Motor, the alliance was the last card in a game of musical chairs in which world automakers have been dancing to the tune of mergers and allainces, all trying hard not to be left standing alone and vulnerable, industry analysts said. Hyundai Motor has been looking for an alliance partner among the world's top five producers in order to achieve economy-on-scale. With this alliance, Hyundai Motor can pull up its corporate image and credibility and gain access to world-class technology and marketing networks. Should the two companies' acquire Daewoo Motors, Hyundai Motor will take over nearly half of its operations. DaimlerChrysler is also expected to benefit from the alliance. It chose Hyundai in order to taste a bigger piece of Asia's auto market pie. The German-American automaker plans to pull up its current 8 percent market share in Asia to 25 percent within this year. Medium- and compact-size cars are popular in Asian markets, so Hyundai's strength in those sectors are an instant benefit. DaimlerChrysler acquired Mitsubishi Motor in March, but Mitsubishi is faced with harsh competition at home. Hyundai Motor, on the other hand, is the undisputed king of the Korean market and can thus afford to divert attention to making entries into China and India, whose auto markets have the biggest growth potentials in Asia. A world car project in which Hyundai showed initiative played a crucial role in bringing the two auto giants together. Both are expected to tap synergy by joining hands to develop the most promising auto of the 21st century. Without Hyundai's participation in promoting the world car, DaimlerChrysler would not be able to pursue the project, an industrial analysts said. In case the dream car moves from design tables to assembly, the world market will be divided into three spheres of influence: DaimlerChrysler will control the United States and Western Europe, Mitsubishi Japan and South America, and Hyundai China, South China and Eastern Europe. Regarding their Daewoo bid, the two said they make the best candidate since Hyundai can call on its recent experience reviving Kia Motors and DaimerChrysler can provide technology and management skills. In the meantime, the domestic auto market will be reshuffled greatly if the joint consortium doesn't win the bidding, in which case, it's estimated that Hyundai will take up 65 percent of the whole domestic market, the foreign firm winning Daewoo 30 percent and imported cars 5 percent. (Asia Pulse/Yonhap) |
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