All eyes are on the competition between Hyundai-Kia and Japanese automakers as the South Korean carmaker gains a larger market share and the yen climbs even further.
Hyundai-Kia benefits largely from South Korea's export-friendly trade pacts, giving the Japanese companies more to worry about. Despite the economic crisis, Hyundai continues to be profitable.
In fact, Hyundai Motor Co. and its affiliate, Kia Motors Corp., have generated such a high number of sales in the first six months of the year that they have overtaken Ford Motor Co. to become the world's fourth-biggest automaker.
Japanese carmakers are particularly concerned with the rise of Hyundai-Kia since they compete in the same markets.
There's also the issue with timing. While South Korea has announced its full support for the export industry and had signed a tentative trade pact with the European Union last month, Japan has gone the other way. South Korea continues to add to its list of more than 40 free-trade agreements (FTAs).
On the other hand, Japan has less than a third of those FTAs, mostly in Asia. The South Korean government has made it easier for Hyundai to sell to various markets around the world.
As a result, Hyundai has gained a significant market share this year as the governments put emphasis on cars that produce less pollution such as its Elantra and Accent models.