Wednesday, March 20, 2013

Hyundai Sales Growth Expected to Slow to Five-Year Low

Hyundai, after dramatically raising its U.S. vehicle sales in the past five years, is expecting its slowest growth since 2008 because of limits to its production capability.

Hyundai's U.S. chief executive told Bloomberg News recently that sales are likely to increase 4.4 percent to 734,000 units in 2013. John Krafcik reportedly cited better efficiency at the company's manufacturing facility in Montgomery for that projected gain.
“There are no plans to expand capacity. We have shown the last few years that without a new plant we’ve been very capable of finding incremental production,” Krafcik, said, according to Bloomberg.

Hyundai's recent years of sales gains were led by its redesigned product lineup consisting of the Sonata midsize sedan, Elantra compact and Accent subcompact.

Hyundai this year is rolling out a new version of its Santa Fe SUV.
John Tavius, a sales analyst with auto retailer DriveTime in Atlanta, said Hyundai's limited production capacity could hurt it in the long run with consumers.

"It's hard to predict what might happen, because demand is always coming and going," he said. But if enough consumers get frustrated by limited supplies, which would likely bring on higher vehicle prices, buyers might start to look elsewhere, he suggested.

DriveTime's dealerships sell used cars, but Tavius keeps a close eye on the new car market to try to spot emerging trends in the pre-owned segment.

"Buyers focus on the best value for the money, and we see that a lot, so it's not surprising when people start turning away from one brand toward another."

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