South Korea has long been one of the world’s least hospitable markets for imported cars where it’s hard to spot a Toyota. Until 2001, more than 99% of cars sold in Korea were locally built. But nothing reflects the rapid progress in the acceptance of foreign brands better than Toyota’s decision to begin selling Toyota brand cars in Korea.

Sales growth of foreign cars in the past six years has been dramatic. Last year, foreign-built cars topped 5% market share for the first time with sales of 53,390 units. That represents a seven-fold rise from sales of 7,747 cars in 2001. Most of the action has taken place at the top of the market, with German and Lexus brands vying for leadership. BMW was the No. 1 brand with 7,618 units in 2007, and Lexus No.2 with the sales difference of just 98 cars.

Could Toyota change the game plan? Not immediately, but maybe in the longer term. The strength of local manufacturers in non-luxury segment will continue to be a big barrier. Hyundai and its affiliate Kia together control about three quarters of the local market, the third largest in Asia. But competition from non-luxury brands is beginning to pick up steam. Last year, Honda posted an 82% sales jump by moving 7,109 vehicles, mostly the Accord and the CR-V, to become the No. 3 foreign brand. Volkswagen also sold 3,977 cars.

On March 6, Korean and Japanese newspapers reported that Toyota will begin selling three modes from 2009. They are the Prius hybrid, the Camry midsize sedan, and the RAV4 sport utility vehicle. Toyota will probably run separate sales networks for the Toyota and Lexus brands, according to the news reports.

On the morning of Monday, Feb. 4, about 20 of the top executives at the Irvine (Calif.) headquarters of Kia Motors America left their warm offices to stand outside in near-freezing cold. They were awaiting the arrival of Byung Mo Ahn, the president of Kia Motors. The group organized itself into a receiving line and stayed in formation for more than 15 minutes until Ahn arrived in a chauffeur-driven Kia Amanti sedan.

Although some of the executives were shivering, it would have been bad form to return inside: Standing to greet top brass is customary at Hyundai Motor, Kia's Korean parent. After spending a full week in Irvine, Ahn performed another ritual that has become common at the company: sacking the American leadership team. On Feb. 8 he axed Len Hunt, president and CEO of Kia Motors America, and Ian Beavis, marketing vice-president.

It marked the fourth shakeup in three years for Kia's American operation. The U.S. unit of Hyundai, meanwhile, has churned through four top executives in five years. Many of the departures have come at awkward times. Hunt and Beavis got the news at the airport as they were about to fly from Irvine to an annual dealer meeting in San Francisco. According to several sources, Hunt's predecessor, Peter Butterfield, was dismissed during a dinner meeting with dealers at the Bellagio Hotel in Las Vegas—between the entrée and dessert. The companies declined to comment on any of these executive departures.....