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