South Korean products gaining ground in Japan

South Korean auto and home appliance makers are making a big push into the Japanese market, contesting industrial areas that Japanese firms consider their specialty.

Hyundai cars are on display at a Hyundai Motor Japan showroom in Tokyo's Minato Ward earlier this month. KYODO PHOTO

The South Korean firms are slowly gaining Japanese consumers' support, with their cars and home appliances seen as low-priced but good quality. The firms are shaking off the image previously associated with their products: cheap, but you get what you pay for.

Hyundai Motor Japan, a subsidiary of Hyundai Motor Co., displays polished new models in its showroom in Tokyo's Toranomon district with tables and chairs prepared in a corner for visitors.

In business in Tokyo since 2001, it now sells six Hyundai models, including the top-of-the-line Grandeur with a 3,300cc engine. It is priced at about 3.4 million yen.

"It does not pale in comparison with Japanese cars of the same class in terms of quality and equipment," a sales representative said. "But the price of the car is about 1 million yen less."

Target purchasers are in their 40s and 50s. A 46-year-old company employee who bought a Grandeur said he made the decision on the basis of how it handled in test rides, its design and its price compared with a top-of-the-line Japanese car.

Hyundai hopes to sell about 5,000 cars in Japan this year after selling about 2,300 units last year. It also plans to increase the number of its dealers in the country from 57 to 70 within the next three years.

South Korea's largest home appliance maker, LG Electronics, also markets liquid crystal display television sets, washing machines and refrigerators in Japan, with sales totaling about 12 billion yen a year.

Its line of products used to center on low-priced goods. But it is said to be changing its strategy, emphasizing being a maker of high value-added products, including driers with drums, in an effort to eliminate its image as a maker of cheap products.

South Korean products are already well-received in North America and Europe, threatening Japanese goods to some extent.

Samsung Electronics, which is fiercely competing with Japanese makers for top spot in world share for flat-screen television sets, ranked 20th in global corporate brand value in 2006, according to U.S. economic journal BusinessWeek.

It placed higher than Sony Corp. and Matsushita Electric Industrial Co., which were in 26th and 77th places, respectively. Hyundai was lower than Toyota Motor Corp. and Honda Motor Co. but placed higher than Nissan Motor Co.

Samsung and Hyundai enjoy good name recognition around the world due party to being official sponsors of the Olympic Games and World Cup finals, respectively.

South Korea exported about $ 3.8 billion worth of consumer goods to Japan last year, down about 14 percent from a year earlier because of China's emergence in the field of light industrial products, including clothing, according to The Korea Trade-Investment Promotion Agency, a South Korean trade and investment promotion body.

However, its shipments of autos last year were up about 3.8-fold over 10 years ago. Home appliances manufactured in China and other countries under South Korean brands have been penetrating the Japanese market, too, although they do not show up in Japan-South Korea trade statistics.

The firm has advised South Korean enterprises to introduce promising products intensively in Japan based on a strategy of selection and concentration.