A little-known company comes to the U.S. market out of Asia, building affordable, fuel-efficient cars with a reputation for low quality.  Over time, it corrects the quality problems, crafts appealing new designs, and gains market share.  Its sales grow during a recession when most of its competitors are hurting. 

Toyota?  No.  Honda?  No. But they know this script well.

The AP reports, "Hyundai Motor Co. - not the up-and-coming Chinese, nor the leaner meaner Americans - is the automaker that has the Japanese seriously worried. Talk to any Japanese auto executive, and the official is likely to say the South Korean automaker is rapidly emerging as the most feared competitor to Japan's world-leading car companies."

In a recent interview, Honda CEO Takanobu Ito "acknowledged as possible threats the U.S. automakers, including General Motors Co. and Ford Motor Co., which have been reshaping their businesses and preparing smaller fuel-efficient models that are likely to better compete against Honda models. But," the AP notes, "he appeared to be merely being polite in talking about the Americans and turned adamant when the topic became Hyundai."  The Korean company, Ito said, "is awesome...its growth is fantastic."

"Of course," the Detroit Free Press notes, "Hyundai captures less than 5% of the United States sales market today, which makes big gains easier here. But that market share has to come from somewhere, and nobody wants to give up even a point."  At the moment, Hyundai doesn't appear to be stealing customers from any one particular brand, the Free Press reports.  Instead, the company is pulling in shoppers who might otherwise have bought from any of the other automakers.

The Korean automaker, Autoblog points out, "is catching the Japanese by beating them at their own game -- offering a mix of value and quality that's hard for shoppers to ignore."  The company is able to offer products similar to what its Japanese rivals have in their showrooms, but for lower prices.  Nissan Senior Vice President Shiro Nakamura explains, "Hyundai is the biggest threat for the Japanese automakers. They have the technology, but they seem to have cheaper labour."

Hyundai took home its first-ever North American Car of the Year award last year, with its Genesis luxury sedan.  It now appears poised to make a new attempt to take over the lucrative affordable midsize sedan market, with a redesigned Sonata due to appear next year.

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.