Thanks to its virtual monopoly in the domestic market and the successful launch of the latest model of its Genesis luxury sedan, Hyundai posted record profits for last year.

Favourable exchange rates and robust gains in market share in the US and China also contributed to its healthy bottom line.

The numbers are spectacular.

Hyundai's net profit last year more than doubled to 2.96 trillion won (US$2.56 billion) from 1.44 trillion won in 2008.

South Korea's top automaker sold a record 3.1 million vehicles, up 11.7 per cent from 2008. And it has raised the sales target for this year to 3.46 million vehicles globally.

With Toyota's name and reputation suffering following a series of massive recalls involving more than eight million vehicles, many analysts expect Hyundai's global brand recognition to grow.

Currently, Hyundai is ranked the world's No. 4 automaker, along with Kia Motors, after Toyota, General Motors and Volkswagen.

But some analysts say that Toyota's current crisis may not necessarily work in Hyundai's favour in the long term.

"How issues of quality will affect the company largely depend on how honestly Toyota deals with them," said Mr Shin Jeong Kwan, an analyst with KB Investment Securities.

"In 1995, Samsung Electronics was reborn as it launched a general campaign to raise the quality of cellphones after widespread consumer complaints. In 2000, Mitsubishi hid problems with its Firestone tyres and lost the customers" trust.'

He added that so far, Toyota had failed to respond quickly and in a satisfactory manner.

As Toyota's problems grow, Hyundai officials are experiencing a sense of urgency regarding the challenges ahead.

"We basically think that what happened to Toyota can happen to us any time. So we are actually tightening our quality controls and being more careful than ever, although we think the recalls by Toyota can be an opportunity for us," said a Hyundai marketing official, who spoke on condition of anonymity.

Many analysts credit Hyundai's success to a decade of meticulous planning by its executives. It became independent from its parent company Hyundai Group in 2000.

The task of overhauling Hyundai's global image as a maker of world-class cars began earlier. In the late 1990s, the company offered an unheard-of warranty of 10 years or 100,000 miles (161,000 km) for cars sold in the US.

Hyundai car jokes prevailed but the company remained focused on producing quality cars for the mass market.

While Hyundai has had to overcome an image problem overseas - where its cars are seen as reliable but mass-produced, it did not have that problem at home.

In South Korea, Hyundai is a household name and the fact that some car models sold here command higher prices than in the US is a good indicator of its dominant position in the local market.

In the third quarter of last year, its domestic market share was about 80 per cent, with Kia, its sister company, accounting for 30 per cent.

Since 2000, the company has consistently maintained an overall market share above 70 per cent, according to the Korea Automobile Manufacturers Association.

Some analysts say that Hyundai also benefited from the global downturn.

"The government offered some tax benefits to spur the economy and people got more interested in small- to medium-sized cars as the economy went down," said Gong Jeong Ho, an automobile analyst at Prudential Securities.

But he cautioned: "Once the government pulls back its stimulus package, there will be a drop in demand."

Still, other analysts predicted that the Korean automobile industry would do as well as last year, even with governments rolling back stimulus measures, as economies start to pick up.

Still, South Korea's top carmaker is facing increasing competition in its own backyard as more foreign carmakers enter the market.

"Imports are posing a bigger threat than ever so we are taking the battle to the next level - we will not compete based on price but on the strength of our product design and technical merit," said Chaz Lee, managing director at Hyundai's Overseas Marketing Group.

Overseas, Hyundai continues to offer innovative marketing schemes.

Apart from letting people in the US return new cars risk-free if they lose their jobs, it has also introduced a 'Gas Lock' programme which guarantees a new Hyundai car buyer a stable petrol price for one year at US$1.49 per gallon or US$1,000 back in cash rebate.

The successful product differentiation by launching the Genesis luxury line in the US has also opened up new possibilities for the company.

"Genesis has fulfilled its goal of raising the credibility of our brand as more new car buyers than ever are putting Hyundai on their consideration list," said Oles Gadacz, a managing director at the company.

"Given all the rave reviews, The North American Car of the Year trophy and a long list of awards, it has changed the way a lot of Americans think about the brand."

With the sales volume of the Genesis still modest in the US - 13,000 units sold last year - Hyundai is stepping up efforts to enhance its brand image.

For maximum exposure, Hyundai buys airtime, like its rivals, for its advertisements during the Super Bowl, the most-watched sports event in the US.

Last year, it bought five 30-second slots but declined to say how much money it spent on the ad campaign. A 30-second slot during the Super Bowl can cost about US$2.5 million.

The company's relentless efforts have paid dividends.

The US Consumer Report named the Hyundai Tucson the best car in the small SUV (sport utility vehicle) segment for 2009 and the Hyundai Elantra SE as the best small sedan.

And at the Detroit Auto Show last month, the Genesis was voted the 2009 North American Car of the Year.

"Hyundai was an upstart and that image lured the competition into a false sense of security. They got caught flat-footed when the Genesis came out," said an auto industry analyst, who spoke on condition of anonymity.

"The company also has a very top-down approach which makes it much easier to implement measures very quickly." he said.