What's in a nameplate?

Over at ROK Drop, GI Korea has presented a photo of the new Chevrolet Tattoo. As I wrote there, that seems an odd name for a car in Korea, given the negative associations with body art (particularly associations with gangsters, as well as the illegality of using them to evade military service).

I had thought about driving home the point with an analogy, that it would be like calling some vehicle the Jeep Tramp Stamp or the Buick Bong. And then I remembered Korea already had a line of vehicles starting with bong.

If the "Tattoo" name idea came from Detroit, all I can say is someone seems to have dropped the ball on that one. Then again, it could be from Korea-based GM Daewoo itself, the folks who brought you the Daewoo Impact in the 1990s. Yeah, the name sounds cool at first, until you realize you're driving a safety-impaired metal box named for what happens when you forcibly smash into another object.

Then again, poor name choices seem the order of the day. Kia is trotting out its new luxury vehicle. Continuing with the K3 (Forte), K5 (Optima), and K7 (Cadenza), we now have... wait for it... the K9.

Yeah, in addition to sounding like it's a police car with an angry Rottweiler inside, how wise is it for a Korean car maker to make the name of its flagship model sound like the same thing mindless bigots and unclever comedians associate with Koreans eating for breakfast, lunch, and dinner? Anyway, the grille is supposed to be more feline (it's a tiger's mouth) than canine.

Anyway, in other car news, Hyundai and Kia have both been riding a wave of good fortune in the American car market, up 18 percent and a whopping 37 percent from the previous February, respectively.

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SoKo in the SOTU

With the passage of the Korea-US free trade agreement (aka KORUS FTA) being one of President Obama's key accomplishments in 2011, a year marked by contentious relations with an obstructionist Congress, it's no wonder he decided to highlight it in Tuesday night's State of the Union address:

My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.

We’re also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements I signed into law, we are on track to meet that goal – ahead of schedule. Soon, there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon, there will be new cars on the streets of Seoul imported from Detroit, and Toledo, and Chicago.

I will go anywhere in the world to open new markets for American products.

Putting Fords, Chryslers, and Chevys on Korean roads is a frequent theme of Obama's speeches, although everyone should realize by now that General Motors, in the form of GM Daewoo, is the third largest automobile company in South Korea, and it now comes with a Chevrolet nameplate.

But the very next thing in the address is a warning to unfair trading "partners":

And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration – and it’s made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It’s not right when another country lets our movies, music, and software be pirated. It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized.

Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia. Our workers are the most productive on Earth, and if the playing field is level, I promise you – America will always win.

When so much of the rhetoric about the KORUS FTA revolved around supposedly unfair advantages that Korean car companies had over their American counterparts, I'm not too happy about the juxtaposition of trade with Korea and trade with China.

But that's me. I suspect that the same people who aren't sure which Korea is the good one might also think Korea is a city in China.

Indirectly, there were other mentions of Korea, particularly in reference to military affairs:

The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our iron-clad commitment to Israel’s security has meant the closest military cooperation between our two countries in history. We’ve made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we’ve built to secure nuclear materials, to the missions we’ve led against hunger and disease; from the blows we’ve dealt to our enemies; to the enduring power of our moral example, America is back.

Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about. That’s not the message we get from leaders around the world, all of whom are eager to work with us. That’s not how people feel from Tokyo to Berlin; from Cape Town to Rio; where opinions of America are higher than they’ve been in years. Yes, the world is changing; no, we can’t control every event. But America remains the one indispensable nation in world affairs – and as long as I’m President, I intend to keep it that way.

I'll admit I've only read parts of the speech so far, but I plan to listen to it sometime in the next couple days. It seems to have been well received, even if much of it is unrealistic given the vehement opposition he faces in the House of Representatives.

I didn't vote for Obama, but I do like the guy a lot more than I do any of the GOP candidates left in the race, and I think Obama deserves more credit than he gets. We are in a much better place than we would be otherwise, he's gotten some very important things done, and I think he has the vision, the smarts, the people, and the drive to keep moving us forward.

Tea Partiers mockingly call him "The One," but he is, right now, the one I want.

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Kia has Black hamsters; GM has Korean guinea pigs

General Motors will launch its new Cruze5, a hatchback version of the Chevrolet Cruze, in the Korean market. This is another sign of the importance South Korea has in GM's global perspective.

Anyway, kind of a cool-looking car. Sporty hatchbacks seem to be making a comeback even with mid-sized cars. In Europe, Hyundai's flagship Sonata (called an i40 there) will also be available as a hatchback.

South Korea to be first to make the all-new 2013 Chevy Malibu

General Motors, which recently rebadged its South Korean operation by dropping the Daewoo name for the more global Chevrolet moniker, announced that its plant at Pup'yŏng (Bupyeong) will be the first in the world to make the all-new 2013 Chevy Malibu.

The goal is to expand GM's general footprint — and Chevrolet's specific presence — by pushing some of its more popular global offerings, and they think they have a winner with the Malibu:

Adding the Malibu may further bolster GM’s momentum in the Korean market. The automaker reported today that its Korean unit sold 71,608 vehicles in April, marking an 8.5-percent increase year-to-year, and a 5.9-percent increase over March. It’s unknown exactly how well the Malibu will pan out in the market, but GM points to strong digital interest — Korean fan clubs for the new model reportedly have over 30,000 members — as a predictor of things to come.

It is indeed a smart-looking car. GM also sells several Buick models, which it's marketing as upscale luxury vehicles, so we may see General Motors give Kia and Hyundai a run for their money.

The future is Miray?

The Wall Street Journal has a focus on General Motors "plastering" the Chevrolet name all over South Korea, with an explanation for those outside South Korea why the switch from the Daewoo nameplate took so long (and was so sensitive).

Meanwhile, The Independent has a report from the Seoul Motor Show talking about GM Korea's and Ssangyong's respective plans to take on the Hyundai-Kia juggernaut that controls three-fourths of the South Korean car market.

My favorite find today, however, was in USA Today, which highlighted auto insurance provider USAA's "best values" among automobiles sold in the US today. Four of the seventeen were Hyundai or Kia offerings: Hyundai Sonata (best midsize sedan), Hyundai Genesis (best large luxury sedan), Kia Sportage (best small SUV), and Kia Sedona (best minivan; it's the Kia Carnival in South Korea).

The list also includes the Chevrolet Cruze (best small sedan), which counts as partial credit as a Korean make.

Hyundai and Kia are riding high, but Detroit has stepped up their game

Coming out of 2010, from which Hyundai and Kia emerged with a whopping 21.7% increase in sales from a year earlier, the other big story is that Detroit has finally surpassed its Japanese competition to regain the number-one slots. Part of this is the ugly truth that even at $3/gallon fuel, many Americans still want to drive meaty gas guzzlers, but another side of it is that American carmakers are responding to a skeptical market.

Oh, and then there is that other factor. While a couple years ago, Toyota Motors seemed unstoppable, it turns out that it was Toyotas themselves.

From the Los Angeles Times:

For the first time in years, American nameplates such as Chevrolet and Ford outsold the Toyota brand in the U.S.

Sales of trucks and sport utility vehicles, which are American manufacturers' bread and butter, are on the upswing. Rental companies and commercial fleets, which favor domestic products, have been doing some heavy buying.

"Another factor is that the domestics are bringing out strong new offerings in other segments," said Jeremy Anwyl, chief executive of Edmunds.com, the auto information company. "We have yet to see a coherent response from the Japanese.

"Toyota has had a brand image crisis, while Honda has taken a very conservative approach to market share," Anwyl said, and "may have left sales on the table."

Overall, Toyota Motor Corp. was the only major auto company to see sales decrease from 2009.

Well, if even Americans are starting to look at Chevys more favorably, maybe the plan to rebadge Korea-made GM Daewoo vehicles as Chevrolets isn't such a nonstarter after all. (Actually, I kinda like the idea, and it does remind me of way back when in Korea, when you could see Korea-made Fords plying the streets of Seoul.)

And speaking of Korean cars, this is what the above article had to say about Hyundai/Kia's changing fortunes:

Audi of America, Hyundai Motor Co. and its sister company, Kia Motors Corp., and Subaru of America all set U.S. sales records and gained market share despite the slow pace of auto sales overall. Volkswagen of America had its best year since 2003.

Analysts were impressed by the growth at South Korea's Hyundai and its Kia sibling. They sold a combined 894,496 vehicles in 2010, up 21.7% from the prior year and very close to Nissan's total of 908,570.

"We used to call the top makers the big six — the domestic three and the Japanese three — and now all of our analysis is based on the big seven and includes Hyundai," said Jesse Toprak, an analyst at TrueCar.com.

Hyundai has made the leap from a brand for people "who couldn't buy or afford anything else" to one that offers vehicles "people choose to buy based on the merits of the products," he said.

I think I'll print this out and post it in the window of my mother's Santa Fe.

PBS Newshour gets it wrong on the KORUS FTA

I've made no secret that I love PBS's Newshour and I recommend it as the single best layperson's source of comprehensive, objective, nonpartisan, and dispassionate analysis of the important political, economic, and social issues facing the United States and much of the world (that, Sesame Street, and low-calorie cranberry-walnut muffin recipes is why we should support public broadcasting).

But every now and then they do get it wrong, and this "News wrap" piece mentioning the FTA, I feel, was a misrepresentation of what's actually going on:

The U.S. and South Korea have reached agreement on the largest trade deal in more than a decade. The announcement today said the U.S. will lift a tariff on Korean autos over five years. In turn, South Korea will allow imports of thousands of American-made cars. The South Koreans also agreed to lift a heavy tariff on U.S. beef.

Listening to that, someone otherwise uninformed about ROK-US trade might get the impression that prior to now, the import of American-made cars is simply not allowed. In fact, there are loads of American cars on the streets and highways of South Korea — they are imported with an 8% tariff — though they don't do nearly as well as Lexus, Honda, Volkswagen, BMW, and Volvo.

What Kwame Holman should have stated was that the pact would allow each US automaker to export 25,000 cars that do not meet ROK safety standards but do meet US safety standards.

Quoting the Los Angeles Times article about President Obama's praise for the deal:

South Korea would allow the U.S. to lift a 2.5 percent tariff on Korean cars in five years, instead of cutting the tariff right away. Each U.S. automaker could export 25,000 cars to South Korea as long as they met U.S. safety standards; disputes over safety standards had effectively stood as a barrier to U.S. auto exports into Korea. A U.S. tariff on Korean trucks would be phased out and South Korea would eliminate its tariff on U.S. trucks immediately.

Ford and Chrysler have claimed that ROK safety standards amount to a non-tariff trade barrier, even though Japanese, German, and Swedish automakers have had no real trouble meeting them. Detroit, for all practical purposes, wanted special consideration for US-made automobiles: Let American-cars into the South Korean market based not on South Korean laws but on American laws. I can imagine the outcry from Detroit if Hyundai and Kia were to have done the reverse with their cars (although actually, Hyundai and Kia are making most of their cars for the US market in the US).

The idea behind the 25K-per-automaker deal is for Chrysler and Ford to be able to break into the South Korean market without making expensive adjustments for which they don't know if there is going to be a payoff down the road (if the cars meet ROK safety standards, there is no limit).

If the South Korean public decides they want F150s, Mustangs, Escapes, and Equinoxes, then it will be worthwhile for Ford and Chrysler to retool some of their output specifically for the South Korean market, just as South Korean automakers (and everyone else) do for California. (I suppose this benefits GM, as well, but since GM already has a sizable presence in South Korea with ownership of GM Daewoo, it's not exactly the same situation).

All in all, despite Montana's Democratic US Senator Max Baucus being "deeply disappointed" that beef was not addressed, the end result isn't a bad one. I don't like the idea of big, polluting vehicles roaming Seoul streets, but I think the "streamlining" compromise sounds reasonable.

Ben Muse of the Korea-US FTA Blog has more on the details of the re-agreement of the FTA.

WaPo whops Obama on KORUS FTA "setback"

It looks like the failure to get the KORUS FTA agreement done has put the FTA more in the spotlight than it ever was. The Washington Post has some somewhat harsh words for the President:

For those who believe, as we do, that free trade can help fight global recession and prepare the U.S. economy for a new, more competitive future, President Obama's trip to Asia was a disappointment. In particular, Mr. Obama's negotiators were unable to agree with their South Korean counterparts on revisions to a much-delayed U.S.-Korea free trade pact, as Mr. Obama had promised in June. Though both countries insisted the talks would continue, it's anyone's guess when Congress and the Korean National Assembly will finally get to vote on free trade between Korea and the United States.

This setback has many authors, including Korean protectionists who stoked a public overreaction to a long-ago mad-cow disease outbreak in the U.S. cattle herd. But Mr. Obama and his fellow Democrats in Congress have the most to answer for. ...

The vast majority of U.S. business sectors favor the deal, and it would help both economies to grow. However, congressional Democrats blocked it, arguing it would cost American jobs, and as a candidate for president in 2008 Mr. Obama rejected the deal as "badly flawed." In office, he dithered for months, before finally declaring himself in favor of moving forward with a revised treaty.

In opposing the deal during the campaign, Mr. Obama echoed claims by the Ford Motor Company and the United Auto Workers. Under the agreement, Korea and the U.S. would end their respective tariffs on autos and light trucks; Korea additionally pledged to reduce tax and regulatory obstacles to imports, and accepted a mechanism that could permit the US to reimpose tariffs if Korea tried to reestablish non-tariff barriers. Ford and the UAW say that isn't enough, insisting on guarantees that Korea won't use environmental and safety standards as a de facto bar to US vehicles. In the most recent talks, Mr. Obama has been trying to get the Koreans to meet him halfway on this point.

My disappointment with the article is their repetition of the Big Lie:

It's true, as Ford says, that, before the recession, Korean companies sold more than 700,000 cars per year in the US, about 100 times as many as U.S. companies sold in Korea.

Not quite, WaPo. Last I checked, General Motors is a US company, and they are the owners of GM Daewoo, which sold nearly 60,000 cars in South Korea in September alone. When GM's Daewoo vehicles are added to the US side of the calculation, the numbers are far more balanced.

Still, the WaPo redeemed itself a bit by pointing out some other points to consider, mainly that car markets of wildly different sizes will not have car sales parity even if all other things were equal, plus there are all those US-built Hyundais and Kias:

But the US market is 16 times larger than Korea's; and about a third of Korean cars sold in the U.S. are built in U.S. plants, not imported. Maybe what really worries Ford is not the lack of US access to the Korean market, but the potential for increased Korean access to the US market.

All in all, a good article, and I hope more people will realize how many billions of dollars in economic growth the US is missing out on because of the temper tantrums of Ford, Chrysler, and Senator Max Baucus.

See the ROK in your Chevrolet?

Well, it looks like some GM Daewoo vehicles are going to become GM Chevrolets... er, just Chevrolets.

From AFP:

US car giant General Motors will introduce its Chevrolet brand into South Korea next year in an effort to boost sales, the chief executive of the struggling local unit said Thursday.

GM Daewoo CEO Mike Arcamone said the Chevrolet brand would provide "a significant momentum" to increase the local unit's sales and domestic market share, Yonhap news agency reported.

"According to our survey, half of the (Korean) public is familiar with the brand," he was quoted as telling reporters at a motor show in the southern port of Busan.

GM Daewoo, acting as the US company's global mini car development centre, uses the Chevrolet brand overseas but its cars are sold under the Daewoo brand in South Korea.

GM Daewoo's union has opposed the idea of selling the Chevrolet brand in South Korea, claiming it would relegate the company to a subcontractor for the US company.

Indeed, there had been talk of turning all of Daewoo into Chevrolet, but there was opposition, especially from unions, and you don't want to piss off the unions, not in Korea.

Plus, basically, if the Korean automaker remains as GM Daewoo, the narrative is that Daewoo is saving General Motors, but if Daewoo vehicles were to be branded as Chevrolet, as is done elsewhere, the number-three Korean automaker might be seen as just a subsidiary of the American car company.

Of course, the rebranding would have the added effect (maybe) of undermining "the big lie" whereby anti-KORUS FTA types claim that Korea sells oh-so many cars in America (by counting Georgia- and Alabama-made Kia and Hyundai vehicles as Korean) but America sells so few (by counting Korea-made GM vehicles as Korean also). If, say, half of all Daewoos become Chevrolets, it will sound even more ridiculous to make such a pitch.

Meanwhile, over at Consumer Reports...

There is a discussion going on over at The Marmot's Hole about whether American cars deserve their sucky-ass reputation. Seouldout gives some impressive stats that I tried to wade through, but I couldn't find the details. Specifically, where do South Korea's top sellers rank in JD Powers or Motor Trend?

South Koreans bought South Korean-made cars for two reasons (though the two reasons were not always present in each person): they were cheaper and they were Korean. Nowadays, South Koreans who can afford more expensive cars might still choose South Korean cars because they're not just better than before, but because they're now supposedly among the best. Why spend as much or more on a Honda or Toyota when you can buy a Hyundai Sonata that will not just be about as good but also a lot easier and cheaper to fix? Same with a Ford or a Chrysler.

At any rate, Consumer Reports, which I used to buy my Acura back in college, is still the most comprehensive approach to getting a reliable, affordable, and safe vehicle. This is what they have to say about the topic:

Asian brands still dominate

The major Japanese brands and South Korea's Hyundai and Kia make plenty of reliable vehicles. Of the 48 models with top reliability scores, 36 were Asian. Toyota accounted for 18; Honda, eight; Nissan, four; and Hyundai/Kia and Subaru, three each.

On the whole, Japanese vehicles are consistently good. All Hondas and Acuras were average or above. Toyota, with its Lexus and Scion brands providing a broader product range, had just one vehicle that was below average in reliability, the Lexus GS AWD.

The Nissan and its Infiniti luxury division have been mostly very good despite lapses such as the subpar Nissan Quest minivan. The once problematic Infiniti QX56 and Nissan Armada SUVs are now average, and the same goes for the 4WD Nissan Titan pickup, although its RWD version is still troublesome. Over the last two surveys, the Nissan Versa hatchback has been average while the sedan has been far below average-an oddity.

Subaru has been a very reliable brand, but this year the turbocharged Impreza WRX turned up with a worse-than-average reliability score even though other versions of the Impreza have been average or better, as were all other Subarus.

Hyundai and Kia continue to make reliable cars. The Hyundai Elantra and Tucson, and the Kia Sportage got top marks. The new Genesis sedan was better than average with the V6, average with the V8. The only models that scored below average were the Kia Sedona minivan and Sorento SUV.

I have nothing against American cars. The first car I ever rode in was a Chrysler, and I learned how to drive with that very same vehicle fifteen and a half years later. I drove that same car to college a couple years after that, and I was twenty when my dad called me and asked if I didn't mind him finally selling that car — which was still running just fine! — which everyone in our family felt had sentimental value. By contrast, my mom's more recent Chrysler, a minivan, has been crap. Two of my siblings also bought Chrysler minivans, and they all seemed to fall apart — in dangerous ways — at the same time.

But I'm sensitive to quality changes. I'd heard good things about Buick, which I think could make a serious dent in the Korean marketplace with the right marketing. (Use Cadillac and Buick to tag-team the market: Market Cadillac as a high-quality, upscale vehicle, while offering Buick as a poor man's Caddy.) When I came to Hawaii, my first time living in the US since returning to South Korea after graduating from college, I took a baby-step toward buying an American vehicle: a used Honda manufactured at an Isuzu plant in Indiana. To be honest, this Honda Passport SUV didn't have the greatest of ratings, but it is reliable and it is a good fit for Oahu's crappy roads. That's my nod toward buying American for now.

Anyway, I'd like to see American cars do well in Korea, just like I'm thrilled to see Korean cars doing better and better in the US. But American carmakers have to stop blaming the Korean government for their failures. If they cannot keep up with the Japanese and Germans in South Korea, then there's something wrong with the way they're doing business.

Whining about South Korea's protectionist practices of a decade and a half ago (e.g., audits of foreign car buyers, which was justified by the presumption that people who could afford vehicles with these huge tariffs were those who had gotten money through corrupt means and/or were hiding sources of income) or pre-GATT tariffs that nearly doubled the cost of a car, are just showing not only how out of touch they are with what's really going on in the ROK, but also how they're trying to distort reality so they can make a better case in Washington.

If you need some ideas, email me. Let's talk.

Senator Dodd perpetuates the Big Lie about Korean car imports

During my morning iPod-enhanced jog, I caught the iTunes podcast of NPR's NewsHour. The subject for this particular segment was the Detroit bailout. Speaking in favor of it was Senator Christ Dodd (D-Connecticut), while Senator Richard Shelby (R-Alabama) was steadfastly against it.

Shelby would like to see Chrysler, Ford, and General Motor go into a pre-arranged bankruptcy and reworked. Dodd pointed out that, unlike with an industry such as airlines where the consumer's relationship ends as soon as they pick up their bags at the destination airport, there is a problem with buying a major item like a car from a bankrupt company.

All in all, it was a good summary from both as to what each side of the bailout issue thinks. I even thought of linking to it for that reason alone. But what compelled me to blog about it was when Senator Dodd deflected blame from the Big Three and their supposed mismanagement and put it squarely on the shoulders of South Korea:

The word last Friday was 533,000 jobs were lost in this country in one month. And certainly none of us want to wake up in January and discover that America no longer has a viable automobile industry.

You know, we talk all the time about how well these foreign companies do. Let me just cite one free trade agreement with South Korea. In that one agreement, all we can do is sell 5,000 automobiles in South Korea. They get to sell 600,000 of their automobiles in the United States.

There are a lot of reasons why our domestic companies are not doing as well, a lot of which is their own fault, but there are other factors, as well.

The message is that it's not just mismanagement that caused Detroit's problems, nor a burdensome benefits package for its retirees, nor the drying up of credit which Americans use to buy cars. No, it's also those dastardly South Koreans who angrily wave pitchforks at cargo ships when they bring Cadillacs to Pusan and throw rocks at Chrysler dealerships in Sŏcho-gu. 

The numbers are almost verbatim what President-elect Obama said on the stump and during the debates during his campaign: The trading relationship between South Korea (and Japan) is unfair, and the lopsided car sales numbers are an example. 

Frankly, I wish someone would explain how lopsided trade numbers are a reason to NOT pass a free trade agreement that would eventually remove many of these barriers. 

Anyway, Dodd takes Obama's numbers and suggests that they are not what is the case now, but what would happen if the FTA were to pass: "In that one agreement," he says, these are the numbers.