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One interesting thing to note about 2014 was that Hyundai and Kia, which went on a sales tear starting around 2010, saw momentum slow in 2014. Kia managed an 8% sales gain, but Hyundai only managed 0.7%. This was in a market that increased about 11%, so even Kia's gain was below the median. Recently, Hyundai-Kia guided flat sales again for 2015. Profit was down 22% last quarter.
There are theories about why Hyundai and Kia are losing steam, but according to Hyundai Motor, the flat sales are due to constrained inventories. They expressed fears of growing too fast and running into quality issues like what happened to Toyota a few years ago, so Hyundai corporate has postponed construction of new assembly plants supposedly for that reason.
That's the story we hear from the CEO. However, what Hyundai doesn't tell us is that fleet sales increased 16% in 2014, more than any major automaker. The only other automaker with double digit increases was Nissan. In December, Hyundai-Kia's fleet sales were up a whopping 56%, which means the majority of December 2014's record gain was due to fleet if I did my quick and dirty math correct.
If inventories are so constrained, wouldn't it be prudent to cut fleet sales and shift them toward more profitable retail sales? The numbers seem to show Hyundai-Kia are dumping into fleets to maintain share, much like Detroit used to do years ago.
The Sonata is normally Hyundai's biggest seller, but the new 2015 model hasn't been selling well. They made the styling a bit too bland, and in fact, already have plans to change it. They were trying to please the Korean market, who thought the last Sonata was too flashy.
Another big issue for them is the appreciation of the South Korean Won against the U.S. dollar. Hyundai has been riding the currency exchange wave for quite some time which put them in an advantageous financial position. With the Won rising profits are falling (this is where the double digit decrease in profit comes in). They will be just fine in the long term but this will take some steam out of them in the near term.
Hyundai first sold on price, now more on being competitive, but they are not the best automaker out there. maybe they have about topped out where they are going to be without expanding their lineup more, or going to the top in their class for quality/features.
I think the new design of the Sonata was a misstep. Went a full 180 from the previous generation. They should have kept the theme going and went with an even more dynamic design.
Now it just looks like a Toyota. And if you look like a Toyota might as well just go out and buy a Toyota.
2015 Sonata exterior styling is very subdued, but the interior quality and design is a big improvement. The Sonata Eco model has the 1.6L Turbo, higher fuel economy, and fastest acceleration of the three gas powered models. Hyundai is releasing their Sonata plug in hybrid which should improve sales of this model. The Elantra is due for a new model soon. The Genisis was recently redesigned (both coupe & sedan). The Equus is a great looking car except for the grill but it too could get an update soon. Motor Trend just did a 5 way minivan comparison and Kia's minivan won the comparison test over Honda, Toyota, Chrysler, and I forgot the last brand tested.
Consequently, the American consumer doesn't see near as much of a need for a cheap, low-end fuel efficient car as they did 5 years ago...
Gas is going back up partially due to a steel workers union strike at refineries. Gallup reports the White House unemployment numbers are false, actually much higher unemployment than reported.
Just my opin and anecdotal about one of Hyundai's models: when we bought a replacement small suv for my wife in 2010, the H Tucson was fresh looking, drove OK, (she liked it), and came loaded for ~$28Gs in the Limited version, with all bells & whistles. We traded in her pos 2003 Honda CR-V, (built in England), that may have been one of worst cars I've owned in 50+ years of cars.
The Hyundai Tucson Ltd has run well for almost 50k miles/4.75 years. If it continues this lucky/good stretch we will probably keep it another year, or three, depending on the CEO's desires...
It holds four people, four sets of golf clubs, gets ~24-25 hwy, has been fairly repair free other than normal maintenance, and she still likes it.
But, if it starts to glitch or we were in the Mkt for a replacement, that class of small-medium sized suv like vehicles has broadened, and is now chock full of other interesting, reasonably priced.
The direct competitors were 'less' in 2010; they are now more formidable and with more choices these days, and for the mpg seekers, (not the top of our list), H's Tucson remains 'stuck', while the vaunted ~30 hwy has become the norm, fwiw.
Different field today, like it is for any car brand, and most consumer products of any ilk, imo.
GL, mD
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