S. Korean Auto Firm to Enter U.S. Market

DETROIT â€”  Hyundai Motor Corp., aiming to become the first Korean auto maker to enter the U.S. market, is reportedly planning to open a U.S. sales and marketing headquarters in Garden Grove in time to introduce its first models here next fall.

Hyundai, which began selling its small cars in Canada last year, has already hired away several top American officials from Toyota Motor Co.’s U.S. sales arm in order to staff its own new U.S. operations, a Toyota spokesman confirmed Tuesday.

Although Hyundai refused to comment, Automotive News, an industry trade publication, said in its Jan. 21 edition that the company plans to announce the formation of its American unit next weekend at the National Automobile Dealers Assn. convention in San Francisco.

The magazine also said Hyundai expects to sell 100,000 cars in the United States in its first year in this country.

Could Signal Invasion

Hyundai’s move into the United States could signal the beginning of a Korean invasion of the American car market. General Motors Corp. has already formed a joint venture with South Korea’s Daewoo Group to build cars together in Korea for export to the United States beginning in the 1987 model year, and Chrysler Corp. has been negotiating with the Samsung Group, another big South Korean firm, in an effort to form a joint venture of its own.

Although South Korea’s auto industry is still tiny by American or Japanese standards, the nation’s cheap labor makes it an attractive source of inexpensive cars and trucks for U.S. car companies trying to compete with the Japanese.

At the same time, independent Korean auto makers such as Hyundai now have an opportunity to penetrate the U.S. market while their larger Japanese rivals remain hindered by restrictions on their exports to the United States.

Success in Canada

In Canada, in fact, Hyundai’s low-priced Pony subcompact has already become an instant success, with sales of more than 25,000 in its first year in the country. Just last week, Hyundai introduced its second model in Canada, the Stellar four-door compact.

The United States and Canada are currently wide-open markets for Korean auto imports. But if Hyundai and other Korean firms begin to make a dent in the U.S. market, pressure could build in Washington and Detroit to place South Korea under the kind of limits that now cover the Japanese.

Hyundai has hired Max Jamiesson, a former Toyota executive in the United States, to run its new U.S. arm out of its Garden Grove offices, a Toyota spokesman said. Jamiesson could not be reached for comment. At least two other top Toyota executives have also been lured away from Toyota’s U.S. headquarters in Torrance to join Hyundai, the Toyota spokesman said.

It was not clear, however, how soon the Garden Grove offices will be opened, or how many new jobs will be created in Orange County.