The recent recession caused many automakers to look at their production numbers and try to find way to scale back in an attempt at cost cutting. The same cannot be said for Hyundai, who has seen their sales jump by over 100.000 units since 2010.
While the bottom line looks great, that sort of growth doesn’t come without problems of its own, and those issues were recently addressed by Hyundai Motor America CEO John Krafcik during an interview with the Los Angeles Times.
While sales for Hyundai has increased dramatically, they still maintain one of the lowest inventory levels in the industry; a fact that seems to fly in the face of conventional wisdom.
Krafcik explained that there is a very definite balance between sales and inventory levels that the company hopes to maintain, and that doing so is a process that is always in motion. Production levels have been increased in plants across the US and Canada, but rather than getting carried away with their success, Hyundai continues to try and keep inventory levels low, whilst still meeting consumer demand.
Much of Hyundai’s recent success has been built on the back of the value of their cars, and the feeling among many is that the value message will be lost if they fail to meet demand for their vehicles, putting dealers in the position of arbitrarily inflating prices to take advantage of that demand.
Krafcik countered by stating that dealers are free to set whatever price they wish, regardless of demand and that dealers have actually done a great job of selling Hyundai’s as close to MSRP as possible.
He went on to say that customers have never been more pleased with the value of their cars, despite the fact that the $750 rebate offered by Hyundai is among the lowest in the industry.
Krafcik then went on to talk about the projects that Hyundai has lined up for the coming year, including the release of the Azera and Veloster Turbo models in 2012.
He shared his hopes that the Azera would soon become the flagship vehicle for the front-wheel drive category, feeling that the luxury features that come standard in the Azera would be a huge selling point.
The idea of combining luxury with the Hyundai brand may have seemed like a ridiculous concept just a few short years ago, but the company’s shift to a more design oriented brand that also emphasizes value has quickly changed the perceptions of many in the industry.
That may be most telling with the sales results of the Equus, with many people believing that Hyundai would be unable to jump into the luxury car market with any level of success, especially with a vehicle priced at less than $58,000.
Krafcik was quick to point out that the Equus luxury sedan holds a 5 percent share in the luxury sedan market, which is a number that is consistent with their position in the market as a whole.
He finished up by saying that 2012 looks like it will be another exciting year for Hyundai, and if that’s the case, then perhaps we will be talking about more new sales records this time next year. [Source: L.A. Times]
Hyundai’s mainstream models are now some of the best out there, but please don’t try to tell us the Equus and Genesis are world beaters as well.
Don’t get me wrong, they’re excellent as first attempts, but yet no where near the level the 5/7 series and A6/8 have recently achieved.
Hyundai is making major inroads specifically because the company is now known for building quality, innovative and desirable cars. This well known fact has successfully transformed consumer perception of the brand.
Their current year-over-year November sales surpassed December’s 2010 sales total of 538,228 by a whopping 100k units is significant and we are just into December, the final month of the year. This indicates that Hyundai has yet even more room for growth. I see another 1.5 percent market share increase for Hyundai in the coming 2012 year.
What is also significant is that more and more car buyers have chosen to make both the Genesis and Equus their premium choice for car ownership over other well established and pricier luxury monikers such as Acura, Lexus, Infiniti and yes even BMW and Mercedes.
Lastly, as to the posted comments above, that suggests Hyundai Motor America’s CEO Krafcik, considers both the Genesis and Equus as being “world beaters”, is pure ant food as no where in the article is this even imagined or implied.
@Mobis – it’s very much implied as the Genesis and Equus are lisetd among with Hyundai’s class leading mainstream vehicles.
The Genny and Equus are far from class leading.
The Genesis and Equus are indeed world beaters. Lower price, far better reliability and a much better warranty. Granted, the Audis and BMWs perform and handle better, but that situation won’t last very long. Hyundai doesn’t upgrade their vehicles in increments, but by orders of magnitude. Now that Hyundai has fixed their reliability issues, their advanced drive train platforms and are rapidly advancing their sheetmetal and structural rigidity, the last frontier is handling. What is going to happen when Hyundai starts pouring serious R&D dollars into performance handling? BMW and Audi had better be working on their reliability in the same fashion. Or they will be quickly replaced is all I will say.
Audi and BMW are much more stylish, inside and out.
And Hyundai has yet to get the minutiae right on their lux cars.
All this cat food about whether Hyundai’s Genesis or Equus are so-called World Beaters?
For the record, let me state this fact, consumers are making the decision to move Hyundai up on their periscope and some can’t deal with that. These facts are not going to change no matter that naysayers nit pick about their cars.
Hyundai is all in and they are now dealing from the top of the deck and is becoming quite formidable because they have learned amongst other things, to listen, listen, listen to their customers.
Looks like Equus is doing very well despite naysayers. In my opinion, I think that the Equus offers the same luxury as Benz or BMW but at a lower price point. In this economy, even the rich and wealthy want the most bang for their buck.
We could argue all day about whether car A or car B is better. I think the point made in the article was just that the Equus’s share of the luxury market is 5%, similar to Hyundai’s share of other markets in general — so in that sense it has succeeded.
To your point, that “Hyundai has succeeded” is a resounding yes. They have moved the needle in consumer perception of their brand. They are making all the right moves, having learned from past mistakes.
This fact is made so much more evidently verifiable when looking at their chart topping sales. They are the most feared auto brand of any in Asia and have the U.S. Domestics making a competitive push back.
Hyundai’s brand rebuilding strategy has always been about the long term. The primary reason why they haven’t tried to expand production facilities as fast as demand has been rising is quality. See lessons learned from one of Asia’s biggest, Toyota.
They have transformed themselves into a company willing to take risks with their out-of-the-box thinking on design and engineering and have one of the best safety records when compared against all other auto manufacturers in their respective competitive class.
It doesn’t surprise me that critics have shifted their arguments away from Hyundai’s reliability and quality, to now assail its brand prestige. This is not happening simply because Hyundai has won the reliability and quality message. It is because they have been catapulted by their own engineering prowess, building their own engines and transmissions, producing better built, quality vehicles that rival the competition.
We know this is true because consumer study after study have confirmed this.
In any case, the next generation Genesis will be Hyundai’s world beater luxury sedan, so I’m not complaining.
In the article above, the Hyundai CEO mentions a $750 rebate. What is that all about