Can Japanese Auto Makers Get a Break?

Industry experts generally agree the U.S. is looking at 13.5 million new-vehicle sales in 2012, barring an economic setback.

In the automotive market-share contests, Chrysler and Hyundai currently are the stars of the show, with Ford, General Motors, Volkswagen and Kia also recording significant gains.

Life has been unkind lately to the Japanese, especially Toyota and Honda. It’s sad to see their dealers trying to sell future product off near-empty lots. The best dealers are focused on pre-owned sales.

Back in August, we optimistically were looking at a return to full production by Japanese auto makers by mid-November, rebounding from the March earthquakes and tsunami. Then Thailand gets hit by a major flood, knocking out parts production for most Japanese manufacturers there, even affecting Ford parts supplies.

Those parts suppliers might not be fully back up before third-quarter 2012. Some estimate the floods will have canceled production of more than 100,000 cars and trucks before the end of this year. It seems like the hits just keep on coming.

Inventory shortages for all nameplates are keeping used-car prices artificially high. Actually used cars are commanding stupid money right now. If dealers want to be in the game, their buyers will be in the auction lanes with their hands up until their arms cramp.

We keep looking for that bubble to burst when we return to full new-car production. But it’s obviously hard to predict natural disasters and their effects.

Hyundai and Kia dealers are low on inventory, too. They could sell more if they could get it. The problem is their plants are at capacity, and Hyundai is cautious about building new manufacturing plants in North America until the longer-term U.S. economy stabilizes.

That is good news for the Japanese manufacturers, because it is the only reason the South Korean auto makers haven’t captured even greater market share while Toyota and Honda are on the ropes.

I love the aggressive marketing that is transforming Hyundai into a premier franchise. Fifteen years ago, when I was telling dealers to buy Hyundai and Kia franchises, I was the voice in the wilderness. Quality and image were terrible, but I felt it coming.

Now, John Krafcik, head of Hyundai’s U.S. unit, announces the brand will air five Super Bowl commercials. I predict Hyundai’s advertising will aim at consumer brand perception.

Hyundai will focus on mainstream brand awareness and prestige. It will position itself as an A-Team player with quality, styling, performance and the best value in the industry.

The Ford Mustang and Chevrolet Camaro are duking it out in the muscle-car arena, with Dodge Challenger practically sitting on the bench. Guess what? At the SEMA show, Hyundai just previewed a Genesis sport coupe with a 450-hp V-8 engine. Uh-oh. A Hyundai pony car? Say it isn't so!

Chrysler dealers are the happiest I’ve seen in my entire career. I’ve been vacillating back and forth trying to decide if Chrysler-Fiat CEO Sergio Marchionne is a marketing genius or certifiably crazy.

Well, I’m becoming one of his biggest cheerleaders. I just hope Chrysler doesn’t begin making unreasonable facility demands of its dealers, like other auto makers are doing.

Of course, a huge factor contributing to Chrysler’s industry-leading market-share gains is that it also leads the industry in incentives, averaging more than $3,300 a unit.

One more thing. After a WardsAuto column I wrote in August, Jim Farley, Ford’s group vice president, invited me to company headquarters in Dearborn, MI.

He and his staff took me through the top-secret product development facility and previewed Lincolns in the pipeline through 2015. We had to go through several layers of security, and I was coerced to sign in blood not to reveal certain things I was told or saw.

It was incredible. I will say this: Ford is aggressively committed to go after the high-end luxury market with products that will compete favorably with Mercedes, Audi and BMW.

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at [email protected].