Voracious Demand Has Hyundai/Kia Struggling to Keep Up

2012-hyundai-sonata-front-three-quarter-3

In the past decade Hyundai and Kia have rocketed from the bottom of the barrel to the top of the heap, and now its dealers are starting to feel the pain. Due to high popularity of the brands’ new models, the car makers can’t produce enough vehicles to meet demand.

Speaking to CNN Money, Hyundai CEO John Krafcik said that worldwide production of North American models was “more or less maxed out,” leaving dealers “quite upset that they can’t get cars.”

Thanks to the robust sales, Hyundai and Kia – which are owned by the same parent company – now roughly equal Honda’s market share in the U.S. Hyundai’s cars have been retailing with less rebates as well -- $737 on average versus $2385 for the industry. And although dealers have been unhappy with the shortage of vehicles to sell, they have been pleased that Hyundai was able to begin leasing programs last year thanks to the brand’s rising residual rates.

There is currently no talk on whether or not Hyundai/Kia will build another factory in the states to help sate demand for their cars. Currently, Hyundai has one plant in Montgomery, Alabama where it produces Sonatas and Elantras; Kia has a plant in West Point, Georgia where it builds its Optima midsize sedan and Sorento crossover, as well as the Hyundai Santa Fe crossover that the Sorento shares its platform with. 600,000 vehicles annually can be built between the two plants.

So far this year, Hyundai has sold 440,863 vehicles and Kia has moved 331,796.

Source: CNN Money

Jeff
Not likely. The Japanese are at a severe competitive disadvantage that is going to erode their profits severely. No capital invest in ongoing research and development leads to inferior new designs. The lack of profits means cheapening of the materials. The Koreans are in it to win it and are going full bore while the Japanese had become complacent. Hyundai and Kia are continuing to make substantial investments and upgrades to their product line and are producing products that are best in class. They are now ahead of the Japanese in nearly everything except hybrids and in some ways lead in hybrid technology also. As they continue to push the accelerator and bring out new models in ridiculously short time frames, the Japanese will continue to fall further behind. Especially with little in the way of profits to re-invest. I myself could easily have purchased a Yaris or a Fit. Finding the new Accent was quite a chore. Well worth it, though. Love the car. From the likes of many of my family and friends, people are buying Hyundais and Kias in droves and are really loving their vehicles. Like the Hondas of old. I'm not finding the same love for Honda these days.
Reasonable_Car_Enthusiast
Are you insane? I don't know what Honda world or regular world you live in, but my local Honda dealership has had the same cars on the corner lot for a year. They can't move their inventory, because 10 years ago, this company stopped caring. Their design is non-existent. Their innovations are few and far between. The Koreans are looking amazing recently, but half the reason is that the Japanese big two have become stagnant! Wake up, fanboy.
steve
funny!!!!! yawnda
eagle1609
welcome to Honda world. Honda has been doing that for years, imagine people buying Hondas without even a test drive, customers will wait for a CRV for 6 weeks, when they can get a Tucson in 15 minutes - that is crazy.
Will
C'mon Japanese. Kick some Korean booty.
ConceptVBS
What a fantastic turn around the folks at Hyundai has made. They boasted that by the year 2015, they will be one of the biggest car makers who are also the most loved by their owners. Look at them now. Their cars are selling off the lot like fire. The Elantra stays in its dealers for ONLY 7 days before the car is sold. I've seen countless times where the cars are sold even before the trucks drop off the cars to their dealers! Some dealers had to pay their customers (who just bought the last Elantra) just to showcase their cars inside their dealers! Of course, the daelers gave them a loaner ( a Sonata ). How crazy is that?!
mE
They sold out almost all models in the Canadian market. Gee, I guess people don't actually want to buy boring looking cars anymore. Those sales are all taken from Toyotah and Yawnda.

buyer's guide

Find vehicle reviews, photos, & pricing

our instagram

get Automobile Magazine

Subscribe to the magazine and save up to 84% off the newsstand price

subscribe

new cars

Read Related Articles

TO TOP