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Published on September 5, 2007

Meanwhile Isuzu, which offers only pickups, turns out to be the second best-selling brand in the country.

South Korean cars made their mark in Thailand some time ago. Hyundai particularly opened up the market with its Sonata and Elantra sedans and it was followed by Kia, which did pretty well with the Sportage compact SUV. Daewoo was also brought here by a Thai garment industrialist, and its management included many people from the automobile media industry.

But today only Kia is present in Thailand, and it is run by the Yontrakit Group. Meanwhile, Hyundai has been preparing to re-enter the market via a new distributor in the current quarter, and this is where the questions come from this week.

Khun deajungkum_th asks the following:

I have heard that Hyundai is making a return to Thailand at the end of this year, which is the same period that I plan to buy a new car. Can you comment how interesting this is and how long do you think Hyundai will stay in Thailand this time, or will they leave the customers to suffer like last time?

Back in 1994, Hyundai was distributed by the PNA (Phra Nakorn Automobiles) Group, which at the time was considered an experienced automotive group. A wide range of models was offered in Thailand.

But Hyundai eventually withdrew from the Thai market, and customers were left stranded with the cars with no service. They had to search for their own parts and the resale value of Hyundai products plunged to almost zero.

There were always rumours that Hyundai would make a return, but it was not until last year that it was confirmed Hyundai would come back, and not by a Thai or Korean company, but a Japanese holding company.

In October, the new Sonata will be launched, although we still don't know the specifications (as well as equipment package or price), so it is difficult to comment. But executives from Hyundai Thailand say it will be assembled locally and will be able to compete against the Toyota Camry, the Honda Accord and the Nissan Teana, with slightly lower prices.

Competition in this segment is surely lower than in the compact car segment dominated by the Honda Civic or Toyota's Corolla Altis. But don't forget that the Accord was once the dominant car in this market, and it was only a few years ago that the Camry overtook it by a wide margin.

So I believe that Hyundai chose to launch the Sonata because it can make more profit per unit than with smaller cars. But the resistance from a leader like the Camry will surely give the Sonata a hard time, and if Nissan starts to spend more money on the Teana, as it did with the Tiida, the situation will be worse for the Korean newcomer.

During the launch period of the Sonata, Honda is scheduled to sponsor a major golf tournament, and consumers will be very aware of the Accord's presence then. This will be another barrier for the Sonata to overcome.

So I say that if Hyundai manages to sell 400 units of the Sonata from the launch to the end of the year, they will be considered successful.

And because the distributor is not Hyundai itself but a holding company, there is no guarantee that it will stay for good. These days if there is no profit, the distributor is ready to pull out any time, especially if it is not the actual brand-owner.

So whether it will stay or not will depend on the commitment of the new distributor, whether it will be happy to support old Hyundai customers with parts and service. If there is no commitment in this respect, then it will be hard to create brand loyalty from old or new customers.

The only advantage that Hyundai will get is the fact that the Sonata will be assembled at the TAAP (Thon Buri Automotive Assembly Plant), which also assembled Mercedes-Benz cars (and Tata from India). But that doesn't make the Sonata a Mercedes-Benz.

If you want me to say whether you'll be disappointed if you buy a Hyundai, I must say that I need to see the actual car first. Secondly, I need to know the price. And, thirdly, I need to know the marketing policy, especially the after-sales servicing.

I suggest that you wait. But if you can't, then there is always the Camry, Accord and Teana to choose from.

Pattanadesh Asasappakij

E-mail your motoring questions to Pattanadesh@nationgroup.com.

Ultimate in Luxury

The Luxury LS 460 is a wonderfully comfaortable car fitted with all mod cons, althoough not necessarily the most fun vehicle to drive.