Never Mind Last Year, Hyundai Has a Good Feeling About Its 2017 Sales Targets
There’s no shortage of uncertainty afflicting the auto industry these days, but Hyundai Motor Company is facing 2017 like a tense office worker determined to put on a brave face around its colleagues.
After seeing its 2016 delivery targets swamped by a wave of market reality — and after canning the CEO of its American division for missing his own targets — Hyundai claims the gray skies will clear up in the New Year.
The year 2016 is one Hyundai would prefer to forget. A Korean autoworker strike threw a wrench into its domestic operations, while changing consumer tastes in North America impacted its car-heavy lineup.
At home, the 12-week strike pushed sales down 7.8 percent last year, Bloomberg reports. Overseas, Hyundai and Kia sales dropped a collective 1.2 percent. It was the automaker’s first global decline in deliveries since the turn of the century — a collar-loosening case of sales fizzle after so many years of sizzle.
Now, just two weeks after firing its U.S. CEO and a week after reports of drastic cost-cutting measures, Hyundai is projecting sales growth of 4.7 percent this year. That means combined global sales of 8.25 million, up from last year’s 7.88 million. Rosy? Perhaps, but the automaker has a plan. A plan, it would seem, that existed before Dave Zuchowski’s termination.
The automaker promises new utility vehicles and improved product flow to the U.S., where sales actually rose in 2016. Hyundai recorded 768,057 sales in the U.S. last year, up from 761,710 in 2015. That increase occurred despite the buying public’s drastic turn away from passenger cars.
Besides the crossovers, the Genesis G70 luxury sedan should arrive next year to bolster the automaker’s overall sales tally. Still, the revamp of Hyundai’s crossover lineup won’t occur overnight, leaving the company’s targets sitting next to a big grain of salt. Reuters reports that the company’s own think tank predicted 1.9-percent growth for the coming year.
[Image: Hyundai Motor Company]
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I have a bad habit of judging car manufacturers by how quickly their moderately old cars rust. I saw an old (8yr?) Santa Fe which had bumper to bumper rust just yesterday. Then I read this. Anyway, I am not sure why somebody would buy one of these over a Honda or Toyota when resale value is considered.
I recently bought a new compact and shopped Hyundai, so I can say the product isn't really the problem. The Elantra is a thoroughly decent little car - it's not something an enthusiast would appreciate, but as a transportation appliance you'd drive for three or four years and then trade in, it beats the snot out a Corolla. I'd say the pricing and dealerships are the problem. And it's not that the pricing is "aspirational" - in reality, the price on the sticker is aspirational, but Hyundais are discounted VERY steeply. Dealers around here are advertising $4-5,000 off Elantras. And I suppose that's a decent dealership sales strategy, but it undercuts the perception of product quality, and doesn't build brand loyalty. If Elantras are as good as Civics or Corollas, then why are they giving them away? To make things worse, every Hyundai dealer I shopped wouldn't quote me lease figures over email. They all insisted I "come in and make my best deal." Yeah, right. Maybe that kind of thing doesn't matter to a 20-year-old community college student with 572 credit and two jobs at big-box stores, or a blue-light-special buyer, but it matters to someone like me. It was a no-sale moment for the car I was looking at, and for the whole brand in general. If they want to move upmarket, I'd suggest doing a Saturn-style pricing strategy - price the product where it should be to begin with, and eliminate the deals-a-plenty antics. Instead of stickering an Elantra at $21,000 and selling it for $17,000, why not sell it for $18,500, no haggle? At that price point, the car is a VERY solid value. With this kind of strategy, they could focus buyers' attention on the cars, and build some brand loyalty. I think the product is good enough to do that.