Hyundai Motor to add SUV models in U.S. mkt to recover sales

South Korea’s Hyundai Motor Group will reinforce its sport utility vehicle lineup in hopes to recover sales in the United States, said Hyundai Motor America’s CEO.

Hyundai Motor plans to launch eight SUV models, including two new ones this year in the U.S. by 2020, Lee Kyung-soo, president and CEO of Hyundai Motor America, said in a press conference held in the U.S. on Saturday (local time).

The Korean car maker’s sales in the U.S. in 2017 skidded 10.4 percent from the previous year with its market share in the region dipping to 7.4 percent, the lowest since 2009 with 7.0 percent.

The company concluded that its slow auto sales in the U.S. were largely due to its weak SUV lineup. Last year, SUV demand in the U.S. expanded 3.6 percent on year whereas the overall American car market contracted 1.8 percent from a year. SUV sales based on the number of units sold accounted for 65 percent of total vehicle sales in the U.S. while the sedan made up the remaining 35 percent. In contrast, Hyundai Motor earned 64 percent of its sales in the U.S. from sedans versus SUVs contributing 36 percent.

Hyundai Motor that has sold only three SUV models in the country until last year will add compact SUV Kona and new version of flagship SUV Santa Fe this year, Lee said, expecting that the Korean auto giant’s U.S. sales would bottom out this year on the SUV addition.

SUV Kona

The auto group aims to deliver 716,000 units in the U.S. market in 2018, up 4.5 percent from last year, said Lee. After seeing a drop in sales across the world last year, Hyundai Motor Group earlier this month set a conservative global sales target of 7.6 million units - 4.7 million for Hyundai Motor and 2.9 million for its smaller sibling Kia Motors - for this year.

In an emergency move to better respond to falling sales in the U.S. market, the company has decided to allow its American unit to start running its sales and production activities under its independent control starting March. Lee said Hyundai Motor’s assembly lines in Alabama, U.S. and Ulsan, Korea will cut the production this year to ease burden from high inventory level and expected the inventory level to normalize from July.

The company will also reduce fleet sales to government agencies, corporates and rental car companies in the U.S. to prevent a further drop in the value of its used cars, Lee said, adding that the company aims to boost retail sales to 86 percent from 74 percent in 2016.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]