Hyundai U.S. Performance Firing on All Cylinders
Hyundai has accomplished so much in so little time in boosting sales and market share in the United States that the brand now has a new problem: It's bumping up against capacity restraints. With a 5-percent share of the American auto market, ranking it as the seventh-biggest seller in the U.S. behind the Detroit Three and the Japan Three, Hyundai can't get many more cars out of South Korea and is feverishly adding capacity in the U.S.
That means Hyundai Motor America CEO John Krafcik must advance the Hyundai brand in other ways, including social marketing moves such as a Re-Mix Lab sweepstakes on Facebook promoting the 2013 Elantra GT, and boosting transaction prices and profit margins, continuing to raise quality perceptions, and introducing still more nameplates. "I'd rather be a little bit short on production and long on quality," he told USA Today.
Besides the huge gains in sales and market share over the last five years, Krafcik has at least partly achieved another of his overarching goals: gaining acceptance for the brand as a full-line manufacturer, from econoboxes to luxury models, rather than as simply a specialist in small and inexpensive cars. American consumers are accepting attractive and well-put-together larger models such as Hyundai Azera sedan and also have embraced the sporty, pricey Genesis coupe.
Krafcik told the newspaper that Hyundai is "making the transition from a value brand to a valuable brand." In doing so, among other things, Krafcik is trying to orient Hyundai attractively toward the huge generation of Millennial consumers, from teens through early 30s — who, according to J.D. Power & Associates, are beginning to return to the car market in greater numbers after a few years on the sidelines.
He is cutting against one trend in the industry: designing and building "global vehicles" that yield a variety of national models from one mechanical platform. "We don't believe in one-car-for-the-world, as some of our competitors do," he said. And neither is Hyundai — with vehicle names such as Sonata and Equus — falling in the with industry trend back toward alphabetical designations.
Hyundai also isn't buying heavily into the industry-wide push behind electric and hybrid vehicles. Krafcik believes that the future of the automobile still belongs to internal-combustion engines. They'll just continue to get smaller and more efficient, as in the new powerplants being fielded in the Sonata midsize sedan after Hyundai dropped the V-6 option last year.