Furthermore, as KH Ahn, president of Hyundai Motors Europe, said recently, even in the face of declining markets in Europe and the USA ‘the economics of the business remain very sound’.

Hyundai and Kia are close to completing a new strategy of local manufacturing which includes plants for both marques in Europe and the US, setting up in Russia, and an increase in production in India.

Now they are ready for what Ahn calls the ‘second quantum leap’ in sales and market share, which Hyundai hopes will allow it to motor closer to Volkswagen and Ford in third and fourth places in world sales charts.

Until recently Korean cars formed the bargain basement of European car sales, taking the place of the shoddily-made old designs from the Communist times in Eastern Europe. But Korea’s car industry has undergone a remarkable transformation, being presented as the new Japan for the 21st century. Success in other businesses has helped change Korea’s image. LG and Samsung are trend-setters in the fashion-conscious world of mobile phones and have established themselves as makers of innovative and high quality electronic products.

Hyundai and Kia learned from the Japanese how to organize an efficient car factory and can claim to have the most modern car plants in Europe and the USA. The two marques are separated but their new factories are positioned with common suppliers of mechanical units – engines and gearboxes – equidistant between each.

The first European product from the group was the Kia C’eed, made at the plant established in Zilina in the Slovak Republic which worked well right from the start in 2007 and produces cars of a standard high enough to justify an industry-leading seven-year warranty. Last year the Cee’d made it on to the short list for the Car of the Year in Europe – something unthinkable a few years ago.

In parallel with the design and development of inexpensive family cars for Europe, Hyundai embarked on an ambitious programme for the premium sector, focussed both on business and official use in Korea and on the biggest market for luxury cars, the USA.

This was Toyota’s Lexus and Nissan’s Infiniti all over again and Hyundai seriously considered setting up a separate premium brand. It decided not to but the first car of this type, the Genesis, does not carry the Hyundai badge; instead it has a purposely ambiguous logo above the Mercedes-like grille.

I drove the Genesis in the USA recently and I was impressed. Its proposition is: the space of a BMW 7-series, the size of a 5-series and the price of a 3-series. Genesis also wants to be considered as a sports sedan but it really isn’t that. What it does do exceedingly well is provide long-distance cruising comfort and refinement, a well-equipped and well-furnished cabin, and a real air of quality. I tested the Genesis V8 in parallel with the Lexus GS460 and concluded that it was, overall, the superior car.

Hyundai is expecting Genesis to sell well in the Middle East, in Russia and of course in the Korean domestic market. It deserves to succeed in America but time will tell whether status-conscious buyers there will embrace a lower-cost rival to a BMW, Lexus or Mercedes. There are no plans to sell it in Europe.

Hyundai’s cars for Europe are gradually being re-named as the ‘i’ series. The i30, its equivalent of the Cee’d, will soon be produced in its plant at Nosovice, Czech Republic. But what most clearly illustrates the company’s global reach is its decision to make the smaller i10 and i20 models in its expanding factory in India – for all markets, including Korea.

Korea used to be a cheap place to make cars but it isn’t any more. Two years ago a senior Kia executive told me that the pay rates at Zilina were one-fifth of the those in its plants in Korea. Like the Japanese before them, Korea’s car makers have found that there are cultural and political advantages of building where you sell and real financial benefits from being established in developing economies.

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