In 2002 Hyundai had its best sales year ever, selling over 360,000 cars to the United States. Having absorbed South Korea’s second-largest car maker, Kia, Hyundai hired German design wizard Peter Schreyer to revitalize Kia’s downmarket products. As head of design for Audi after 1994, Shreyer had been responsible for the A2, the A3 and, most notably, for that instant design classic, the Audi TT of 1999, before he was lured to Kia in 2006. A self-conscious design guru, who wore only black and was often seen behind Philippe Starck sunglasses, in 2003 he won the German government’s prestigious design award, and followed that in 2007 with an honorary doctorate from the Royal College of Art in London, where he had studied as a student in 1979–80. (He was only the third car designer to receive this honour, after Sergio Pininfarina and Giorgetto Giugiaro.)
In 2004 Hyundai opened a new factory in Alabama and a testing centre in the California desert. Five years later the Hyundai Genesis executive saloon – an upmarket model light years from Turnbull’s cheap and cheerful Pony – was acclaimed North American Car of the Year. The following year Hyundai was ranked as the world’s fourth-biggest car manufacturer, behind Toyota, General Motors and Volkswagen – but ahead of every other European and American car maker, manufacturers that had barely registered the Pony’s arrival thirty-four years before.
Not all Korean car makers fared as well as Hyundai. In 1967 the rich, young and ambitious industrialist Kim Woo-jung founded the Daewoo Group, which he soon made into the fourth-biggest industrial conglomerate (chaebol) in South Korea. In 1982 Kim moved into car manufacture, buying a well-established car maker, Saehan, which had long made GM models under licence. When an economic crisis hit the Far East in 1998, Kim thought he could brazen it out by expanding rather than contracting, aiming to rely on the easy credit and cheap labour that had allowed him to expand his chaebol so spectacularly over the previous thirty years. But his credit evaporated, while Korean labour costs spiralled. In 1999 Daewoo – by now the second-largest chaebol in South Korea, and with interests in almost a hundred other countries – declared bankruptcy with debts of 80 billion won. Chairman Kim fled to France, prompting former Daewoo factory workers to distribute ‘Wanted’ posters decorated with his face. Kim finally returned to South Korea in June 2005, and was promptly arrested. He was subsequently charged with masterminding an accounting fraud worth 41 trillion won ($43.4 billion), illegally borrowing 9.8 trillion won ($10.3 billion) and smuggling $3.2 billion won out of the country. After an exhaustingly long trial, on 30 May 2006 Kim – who tearfully told the court, ‘I cannot dodge my responsibility of wrongly buttoning up the final button of fate’ – was sentenced to ten years in prison.
Motor mania also spread to Southern Asia in the 1980s. For decades India’s car makers had contented themselves with making licensed copies of mediocre old British models. Indeed, the Hindustan Ambassador, based on the 1954 Morris Oxford, has been in continuous production since 1958 (although its original BMC engines have now been replaced by smoother power plants from Isuzu).1 However, from the 1980s onwards, many Japanese and European manufacturers began to be attracted to India by its strong engineering base and low wages. By 2010 Volkswagen, Nissan, Toyota and Hyundai had all established factories there. The biggest Indian car maker, Maruti, was bought by Suzuki; and following a 1994 deal with General Motors, Hindustan began to make Opel Astras and Bedford trucks under licence, alongside a range of cars made in association with Mitsubishi and a line of trucks built in partnership with Isuzu and OKA of Australia. Astonishingly, though, the Hindustan Ambassador – the much-loved ‘Amby’ – remains an Indian national treasure which is driven by film stars and politicians alike.2
Underlining India’s new status as an automotive world power, in 2008 – sixty years after the end of the British Raj – an Indian company bought some of the most illustrious marques in British motoring history. In March of that year the Tata Group of India, led by colourful entrepreneur Ratan Tata, bought the rights to the Rover name and the remaining Land Rover and Jaguar factories from Ford. The former British colony may have acquired some of its former imperial master’s most cherished automotive brands, but Ratan Tata was not motivated by sentimentality. In 2010 he made it clear that Tata would be closing one of the group’s two remaining factories, Castle Bromwich in Birmingham and Halewood in Liverpool. In the event, a £27 million government grant earned Halewood (due for disposal after it ceased making the Jaguar X-Type in 2009) a reprieve, and in 2011 the Liverpool plant rolled out the first examples of the radical new Range Rover Evoque.
While Hindustan Motors was still debating how to update the Ambassador, in 1985 Malaysian prime minister, Dr Mahathir Mohamad, opened the brand-new Proton car factory at Shah Alam. The new company’s name was an acronym for PeRusahaan OTOmobil Nasional, or ‘National Automobile Enterprise’. But the plant was effectively owned and run by Mitsubishi, whose first Proton car, the economical, if spartan, Saga, was a thinly disguised Mitsubishi Lancer. Malaysians eccentrically voted the Saga ‘Man of the Year’ for 1985; yet this public acclaim was not reflected in model sales and by 1986 Proton was losing $15,000 on each car sold. The project was turning into a very sorry Saga indeed. Attempts to enter the US market via the good offices of the ubiquitous American automotive entrepreneur Malcolm Bricklin failed dismally. However, Proton refused to give up. In 1989 it made its cars available in the UK; in 1993 the Malaysian government took control of the company from Mitsubishi; and in 1996, to the astonishment of motoring critics and petrol-heads the world over, government-owned Proton bought the legendary British sports and racing car manufacturer Lotus Cars, and even returned Lotus to the Formula 1 grid in 2009.
By 2010, however, it was not America or Japan that constituted the world’s biggest automobile market, but the sleeping giant of China.
Following the political thaw of the 1980s, China’s government-owned auto maker Number One – or First Automobile Works (FAW), as it was now called – began to look for Western partners to help update its drab and oldfashioned products. A link with Volkswagen was established in 1990, and in 1998 the Red Flag marque was reborn in a new Chinese executive model, a thinly disguised Audi A6,1 branded somewhat clumsily as an Audi-Chrysler-Red-Flag. In 2003 FAW did a deal with Toyota, and in 2009, at the height of the recession, linked up with the troubled US giant General Motors. By 2009 FAW was the largest Chinese auto maker, ahead of its four big rivals: Dongfen, closely allied to both Nissan and Honda; Shanghai Automotive Industry Corporation (SAIC), which owned the rights to many of the former BMC/British Leyland/Rover Group models and marques; Chang’an Motors, which had worked closely with Ford since 2001, and which in 2010 agreed to make Peugeot and Citroën cars in China under licence; and Chery, which became notorious in the motoring world for copying GM cars without a licence. In 2010 these five car makers were joined by a sixth Chinese manufacturer, as the previously little-known Geely Automobile Holdings of Hangzhou bought the illustrious Swedish car maker Volvo from Ford. A year later two smaller Chinese auto firms, Youngman and Pang Da, announced that they were buying Volvo’s renowned but ailing Swedish rival, Saab, although their attempts to salvage the moribund firm were in vain.
Conscious of their new status as the world’s biggest car-making nation, from 2003 the Chinese built up the Jiading suburb of Shanghai as China’s motor city – the Detroit of the twenty-first century. In 2004 the newly completed Jiading racetrack hosted China’s first Formula 1 motor race, and work subsequently began on a vast new centre for automotive research and development, developed as a joint venture between SAIC and Volkswagen.
Two million cars were sold in China in 2000; four years later the figure had soared to five million, and by 2010 it was nearer eight million. In 2010 Chinese factories produced a staggering 18.2 million vehicles, compared with Japan’s 9.6 million, America’s 7.7 million and Germany’s 5.9 million.1 Admittedly, the majority of these cars were built by foreign-owned firms. (Honda, for example, launched a Chinese brand, Li Nian, in 2011; its models were sold unde
r the Everus name in the West and its first product, the S1, was based on the platform of the Honda Jazz.) However, the sheer size of China’s untapped market and its vast resources of cheap labour suggest that the nation will soon become a major force in the global auto industry. The future of car making in the twenty-first century seems to lie not in Europe, the Americas nor even in Japan, but in China.
1 Somewhat mysteriously, BMW also retained the rights to the Triumph and Riley names.
1 It was subsequently also built in Toluca, Mexico, and, from 2009, in Kaliningrad in Russia.
2 Although it did horrify some diehard BMW fans, who thought that this extension of the BMW brand was a betrayal of the firm’s racing and motorcycling heritage.
3 Bentley then accounted for a miserly 5 per cent of Rolls-Royce’s car production.
1 First National soon merged with Wachovia. In December 2008, thanks to inadvisable loans like that proffered to the Phoenix Four, Wachovia went spectacularly bankrupt. Its assets were then absorbed into Wells Fargo.
1 The ongoing bickering between Shanghai and Nanjing was resolved in December 2007, when SIAC absorbed Nanjing Automobile.
1 Meanwhile, the German parent company retitled itself simply Daimler AG, losing the Benz name after eighty years.
1 In 2009, too, Hyundai-owned Kia built its first American plant just over the Alabama/Georgia state line, at West Point.
1 Van Braeckl later created the exciting new Continental for VW’s recently acquired Bentley division.
1 The combine was, however, to be dominated by the far larger VW operation. Later in 2009, VW bought a 49.9 per cent stake in Porsche.
1 The VW-owned Seat and Škoda marques, however, are not sold in America.
2 A model presumably aimed at customers in the north of England.
1 The Saab 9-2X, which was built in Japan and was little more than a re-skinned Subaru Impreza, was being called a ‘Saabaru’ even before its launch.
1 The EIB’s stance did not, however, prevent Antonov from buying English football club Portsmouth FC that summer.
2 The car was based on the platform of the Cadillac SRX and built at a GM plant in Mexico.
3 Spyker had already moved its sports car production base from Holland to Britain’s beleaguered motor city, Coventry, in 2009.
4 Ultimately paid only when Antonov’s Gemini Fund generously footed the bill on 5 August.
1 In June 2012 a Sino-Japanese consortium calling itself National Electric Vehicles Sweden (NEVS) announced it had bought Saab and its plant, and that it intended to use the latter to build an electric version of the former Saab 9-3 model. However, Saab AB, the aerospace firm that was Saab Automotive’s original parent, still owned the rights to the Saab name and declared that it would block any attempt to restart production of ‘Saab’ cars outside Sweden.
1 Nasser’s Mark 2 Mondeo of 1996, however, was a retrograde step, its reduced specification and cheap-looking interior enabling the highly successful Opel/Vauxhall Vectra to regain lost territory.
1 Not to be confused with the European Ford Fusion, a larger and taller version of the Fiesta supermini. In the BBC’s Top Gear 2002 awards, the European Fusion won the ‘Most Pointless Car’ accolade – presenter Richard Hammond memorably describing it as ‘a Ford Fiesta in a hat’. Even more confusingly, Fusion was the original name for the car that was finally launched in the US in 2000 as the Ford Focus compact.
2 Together with its corporate clones, the Mercury Mountaineer and Mazda Navajo.
3 Few believed Nasser’s charges; in 2003 U-Haul, the US rental giant, refused to allow Ford Explorers to pull its trailers – a prohibition that still stands.
1 Kwik-Fit, which Nasser had bought at the top of the market, was also sold at a huge loss.
1 Both Gyllenhammar and his father-in-law came from an insurance and banking background, and their insurance company, Scandia, was one of Volvo’s largest shareholders.
2 Ironically, following Volvo’s merger with Renault’s truck operation in 2001, to create Europe’s largest heavy truck manufacturer, Renault now finally does have a stake in Volvo.
1 Volvo’s Swedish former president and CEO, Hans-Olov Olsson, survived only as a member of the new board.
2 By the end of 2010 it had reverted to a still highly creditable fifth, behind Toyota, a rejuvenated GM, Volkswagen and Hyundai.
1 The new brand was emphatically an American initiative; Lexus cars were not sold in the Japanese home market until 2005.
1 An image that was not improved by the 1999 conviction and imprisonment of Chung Ju-yung’s son, Chung Mong-koo, for embezzling over $100 million from Hyundai.
1 The Ambassador was actually offered for sale in Britain in 1993 as the Fullbore Mark 10. Indian Ambassadors were imported into Southampton and fitted with such luxuries such as seat belts, electric wipers (the Ambassador’s wipers were foot-operated) and mirrors, while all the liquid was drained from the car in case any water-borne diseases made it into the country. Predictably, the venture was a disaster, and Fullbore went into liquidation in 1998.
2 Even Sonia Ghandi owned one.
1 The old Audi 100 had been renamed the Audi A6 in 1994.
1 Korea was the fifth-largest producer, at 4.2 million cars. France and Britain lay a distant tenth and fifteenth, respectively, at 2.2 and 1.4 million.
16
Futureworld
Today the world seems to be as in thrall to the gasoline-powered car as it was seventy years ago. In 2003 the number of cars Americans owned surpassed the number of Americans with driving licences; nine out of ten US households now owns a car, and 65 per cent have a second car. (At the same time, in some of the poorer areas of America, 90 per cent of motorists are estimated to be uninsured.) Cars continue to drive the expansion of the developed world’s suburbs; thus Nashville is expanding south down Interstate 65 at a phenomenal rate, while Atlanta races west down Interstate 20 towards the massive new Kia plant. As Catherine Lutz and Anne Lutz Fernandez have pointed out, in America (aside from Alaska and the Louisiana swamps), ‘no spot [is] more than 22 miles from the nearest road’. As a result, urban areas are ever more choked with dangerous vehicle emissions. A Denver study of 2000 showed that children living in corridors of heavy traffic use – which can be up to a mile each side of the highway – were six times more likely to develop cancer than those living further away. In 2007 Phoenix, Arizona, had ninety-four days on which, in the opinion the Environmental Protection Agency, it was unhealthy to go outside. To combat this, increasing numbers of cities are seeking to emulate London and introduce congestion charges, designed to force commuters out of their cars and back on to public transport. But such palliatives cannot hope to hold back the tide on their own. The launch of the London congestion charge in 2003 was initially very successful, but by 2008 impossible levels of traffic were back choking the capital’s roads.
While the world becomes increasingly clogged with vehicle emissions, the vehicles themselves get ever more sophisticated. Electronic ‘active systems’ help cars to brake and park. Stop-start engines save fuel when the car is stationary. Voice-activated controls are now common, responding to everyday speech patterns rather than just to pre-set commands. Electronic stability controls prevent rollovers, and crash-imminent braking systems lessen the likelihood of rear-end collisions. Radar technology ‘reads’ road markings for the driver – though perhaps its introduction has been a little premature, since the general state of the world’s poorly maintained roads means that it only functions properly on pristine superhighways.
On the highway, the SUV continues to reign as the world’s capital car. Even in the recession-hit 2010s, the craze for SUVs shows no signs of abating. Cars like the Audi Q7, BMW X5 and Volvo XC90 continue, for example, to sell far more than their conventional saloon cousins. And SUV drivers, since they are seated higher than their saloon equivalents, feel safer and so often drive faster. But, as we have seen, the sense of safety that SUVs provide is often illusory. Some SUV bumpe
rs are now higher than many highway guard rails.
In more affluent households, the SUV is not the only vehicle on the drive. Many families in the West are now buying two or even three cars in order to fulfil different motoring tasks. Households that own an electric, hybrid or petrol-powered city car for short, local journeys are also tending to purchase larger, more powerful models for long-distance trips. Similarly, sports car users need a more practical runabout for weekday use. In 2011 Toyota launched the tiny Cygnet, a premium, twodoor, city car-cum-hot-hatch, developed in conjunction with Aston Martin. In possibly the most unlikely auto partnership to date, Aston chief Ulrich Bez declared the Cygnet had been created to provide ‘our customers [with] a small car for urban use’. Toyota and Aston expected initial demand to be limited to those who already owned an Aston Martin sports car. The trademark Aston badge and grille were accordingly applied, rather uncomfortably, to the Cygnet’s front end; the interior was given a once-over by Aston’s designers; and the result was launched in 2011 at a sticker price of around £30,000 – a lot of money for a tiny car. In the event, the Cygnet’s minuscule boot couldn’t really accommodate much more shopping than an Aston Martin Vantage sports car.
As the world’s largest car maker, Toyota can afford a few eccentric experiments. As we have seen, the automotive industry at the dawn of the twenty-first century is dominated and directed by the Japanese, the Chinese, the Germans and the French – with the Koreans of Hyundai Kia close behind. Moreover, Japanese cars continue to outshine their American and European rivals in terms of reliability. In What Car? magazine’s reliability survey of 2011, the top eleven manufacturers were Japanese or Korean: in descending order, Honda (top in 2010, too), Toyota, Lexus, Mitsubishi, Suzuki, Mazda, Subaru, Hyundai, Kia, Nissan and (now defunct) Daewoo. The highest-ranked European marque, Škoda, came twelfth, while historic European car makers Renault, Alfa and Land Rover propped up the table – as indeed they had the previous year. Of the ten most reliable small hatchbacks, all but two were Japanese (the gaijins were Volvo’s A40 and Peugeot’s 207). Nine out of the ten best SUVs were Japanese, with the Land Rover Freelander the highest Western entry, at number five.
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