Wednesday, July 29, 2015

To Continue Its Rise In The U.S., Hyundai Needs Trucks

DETROIT, MI – Hyundai Motor America has been on a steady rise in the U.S. since 1999, but its fight for market share here has only just begun.

Hyundai is faced with the same scenario as all companies selling vehicles in the U.S.: Americans want trucks. Their appetite for SUVs, crossovers and pickups has driven new vehicle sales to pre-recession heights this year.

But Hyundai's current product mix is 80 percent sedans. It has but two SUVs it's offering in the U.S. – the Sante Fe and the Tucson - and also continues to develop a pickup-like vehicle based on the popular Santa Cruz concept, unveiled in Detroit last January.

Company president and CEO Dave Zuchowski said the overall U.S. vehicle market is projected to be up about 3.2 percent this year, but the car segment will be down 3.9 percent, and the rise will be entirely on the back of the truck segment, which is projected to rise 10.7 percent.

Hyundai's sales have been steadily growing, but there is still a large price of the pie to be had.

"Our stagnation has been primarily from an inability to compete on the truck side," Zuchowski said Friday at a media event.

Hyundai is going after a bigger piece of that pie with the new 2016 Tucson, a sporty update to its compact SUV that goes on sale next month.

The company expects to sell 56,200 Tucsons this year, but with an increase in production of the new model Hyundai said it aims to sell 90,000 units in 2016.

Hyundai will not have a new subcompact SUV, or CUV, for the U.S. market for a couple years yet, Zuchowksi said, adding that the company wants to make sure it gets a unique styling for the booming segment that is focused on younger buyers.

Until then, the company sees its Tucson as a stepping stone into the CUV category.

The Tucson is loaded with the latest safety and convenience tech, such as lane departure warning, blind spot detection and automatic emergency braking with pedestrian detection.

Also standard is a hands-free lift gate, with which the driver can approach the rear of the car with the key fab, wait three seconds, and have the tailgate open automatically. It has an available panoramic sunroof, optional 19-inch alloy wheels, heated front and rear seats and ventilated front seats.

Under the hood, the new Tucson comes with a couple options: A base, 2.0L GDI that gets 164 horsepower, 151 lb.-ft. of torque and 23 miles per gallon city and 31 mpg highway; or a 1.6L Turbo GDI that gets 175 horsepower and 195 lb.-ft. of torque, while delivering 26/33 mpg on an Eco version and 25/30 mpg on a Sport & Limited trim.

The 2016 Hyundai Tucson starts at $22,700 for the base, front-wheel drive trim, and goes up to $34,050 for the fully-loaded, AWD Limited trim level.

It will compete with the likes of the Toyota RAV4, the Honda CR-V and the Ford Escape.

In general, Zuchowski noted that as a "challenger" company coming into the market, it needs third party validation. That's why it was incredibly important for the company to be named fourth overall in J.D. Power's 2015 U.S. Initial Quality Study, in which it took fourth place overall, ahead of names like BMW, Lexus and Infiniti.

Hyundai has been selling cars in the U.S. for 30 years, beginning with the 1986 Excel. It began by selling about 170,000 units back then. The Korean automaker later hit a low point in 1999, with sales dropping to about 100,000 units annually. It has steadily climbed since then, though, and sold 725,718 units in 2014.

Through the first half of this year, the company's sales are up 2 percent to 371,150 units. With the Tuscon arriving at dealerships next month, no doubt the company expects that rate to rise further before the end of the year.

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