Hyundai Scores Big in U.S. Auto Market

Posted by: Ihlwan Moon on April 2, 2009

It is increasingly looking like the start of a trend that could make Hyundai Motor a star player in a recession. The South Korean company just reported a 0.5% gain in its U.S. auto sales in the first quarter of this year, increasing its market share there to 4.3% from 2.7% a year earlier, the industry’s biggest gain this year. That’s remarkable at a time consumer confidence remained at almost a 42-year low in the U.S. and even respected Japanese auto makers are posting sales falls of more than a third.

In March, Hyundai posted a 4.8% year-on-year sales drop in America to 40,721. But such a fall would be envy for the Detroit Three and even mighty Toyota Motor. U.S. sales plunged 45% for GM in the month, 41% for Ford and 39% for Chrysler and Toyota, 36% for Honda and 38% for Nissan. Hyundai Motor America Vice President Dave Zuchowski notes that his company’s fall in March was from an all-time sales record a year earlier.

Hyundai executives say they are confident their company will keep its momentum in the U.S. They say a growing number of consumers are willing to test-drive Hyundai vehicles as they are looking for value for their money. Hyundai has also benefited from a program introduced in January that lets customers who finance their purchase return the car and have the loan canceled with no hit to their credit rating. GM and Ford started similar programs this week.

The Koreans are pinning their hope on improved performance of new models. Hyundai got an important boost in its campaign to go upscale when its Genesis sedan won the prestigious North American Car of the Year award on Jan. 11. Soon the company will add the new compact Elantra Touring and Genesis Coupe in its lineup. “As long as more drivers are willing to put Hyundai in their shopping list, which I think they will, Hyundai should be able to keep its U.S. market share at over 4%,” says Michael Jung, Hyundai’s senior vice president in charge of sales in North and Latin America.

Reader Comments

LA-Life

April 3, 2009 12:38 PM

What about KIA's market share in U.S. auto market? Is it going to be 7-8% together? That figure may approach to those of Nissan NA in this quarter.

Yugo's demise bad for Hyundai

April 3, 2009 9:48 PM

It's too bad for Hyundai that Yugo went out of business. There's always got to be a butt of the industry for jokes and Yugo was it. Then came Hyundai. Well, Hyundai needs to just wait until a Chinese or Indian company ventures into the US. Then I think Hyundai can finally escape the brand name recognition issue.

Karl

April 4, 2009 4:15 AM

Is it still strong there? I heard that it is moving down slidely due to economic crisis as well as some other reasons, Isn't it?
-Regards, Karl from Resorts 360 team

LA Guy

April 4, 2009 1:02 PM

I read recently that there are thousands of Hyundai(s) sitting at the ports with no place to go. Korean companies tend to ship cars here and count those numbers as sales before being sold. This is because they can finance bills of exchange upon shipment and get cash flow back from the cars. Hyundai dealerships were closing all over the country before this recession hit. I'm wondering if Hyundai is using sales to rental car companies in their figures. Hyundai cars are used as the cheap (economy class) rentals. I doubt people are buying Hyundai cars, especially now.

Russell

April 4, 2009 7:27 PM

@ LA Guy.

You are making assumptions based on what? Do you have a data to show that shows Hyundai cars are piling up at the ship yards?

According to Automotive News, Hyundai has 79 day supplies. In comparison, GM has 161, Chrysler has 151, Honda has 151, and Toyota has 91 days of inventory. [1]

You state that "Hyundai dealerships were closing all over before this recession." Can you name three dealerships that were closed before the recession? If they were closed down, closings were due to other reasons. The Hyundai sales' figure hasn't declined in relative to its past. Thus, in order for some dealerships to go out of business is if their sales number were significantly lower than the past to the point where the stopping the operation was more beneficial than incurring loss within some time period. [4,5] In fact, this very article states that the figure -4.8% is comparison to the all-time-high figure of last year.

Also, if you were wondering if Hyundai is using the rental fleet number into their sales figure, why don't you find out? You have a doubts whether people are buying Hyundai cars? If you had any curiosity, you would have known that Hyundai sold more Genesis (1,626) than Acura sold its RL, 161. [2,3] I can stipulate that People are buying Hyundai through this fact alone instead of your assumption that they are renting these cars.

So many people know so many things that aren't so. People just dream up things as if 1 + 1 = 5. The statement made by "LA Guy" isn't just a simple and naive misunderstanding or some other factors, but it is close to being an illiterate or delusional.

[1: automotive news: March 2009, http://www.autonews.com/article/20090302/ANA03/903020365/1178 ]
[2: Hyundai April 2009 Sales number,
http://www.hyundainews.com/Corporate_News/Sales_Releases/04_01_2009_3052.asp ]
[3. Acura April 2009 Sales number, http://www.theautochannel.com/news/2009/04/01/455476.html ]
[4. McConnell-Brue's Principles of Microeconomics, 0072875615 Page 178. "Shut Down Case" ]
[5. "Economics, European Edition." "Short Term Production Decision" 0716799561 p.223]

Jacob

April 4, 2009 11:08 PM

Hyundai Sonatas match Toyota Camrys in quality and beats them in price and styling (which isn't a hard thing) according to Car and Driver. Move up to a luxury brand technically is a simple step. Lexus ES and Camrys share the same engine and chassis for example. Most of the effort is in marketing. Hyundai does face an uphill climb here. Might have to launch a separate Genesis brand.

A little Yugo humor. What do you call a Yugo van? A Wego.

Sally in Chicago

April 6, 2009 6:48 AM

Well, I'm not an expert but in Chicago I see more and more Hyundai cars and their logo "H" looks like Hondas. I get the two mixed cars mixed up because Hyundai makes very good looking handsome cars. As for Kia, I've heard they're not the best cars in the small car market. But Hyundai is really on a roll.

I live in LA

April 6, 2009 5:17 PM


I feel like Hyundai dealers are pretty much only dealers functioning now.

Lot's of Hyundai dealers are sharing space with Chrysler and they have given up selling Chrysler at the moment...

seoulforest

April 7, 2009 8:47 PM

LA Guy, you got served!

nice work, Russell.

The Canuck

April 14, 2009 5:35 PM

I'm in the process of purchasing a Hyundai Sonata Limited, after driving Camrys for the past 17 years. It beats out Toyota on style, comfort and price - time will tell is it holds up on reliability.

Jinsu

May 1, 2009 10:48 PM

Canuck, you've got 10 years 100K miles warranty on your Hyundai. Do you know what that means to you when it is $100/hour for mechanics? You will have to have an insurance to keep up with your car these days. That's much saving for you.

Lockyer

June 6, 2009 10:54 PM

Everyone I know are buying Hyundais. I've had three and they're every bit as good as my former Acura and Avalon. My daughter drives a Lexus SUV and my wife and I like her Santa Fe more than the Lexus. Hyundai is not Yugo. Hyundai is simply kicking the crap out of GM and Chrysler in quality and value. I guess Hyundai should be concerned about competing with Government Motors and Comrade Obama. I'm sure a former ACORN lawyer will do a great job of making a car people want to buy. What a laugh.

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