Published : Nov. 13, 2013 - 19:40
LOS ANGELES ― Tustin Hyundai, a Hyundai Motor dealer in Orange County, is one of the Korean carmaker’s top-selling outlets in the U.S. Since starting business in the former GM Chevrolet dealership building in 2010, Tustin has seen its car sales more than triple over the past three years.
“This tells that things are changing here,” said Dave Zuchowski, executive vice president of sales for Hyundai Motor America.
“Chevrolet couldn’t make it and closed their store down, and then a high-performing Hyundai dealer purchased this building. There are similar stories all around California and the U.S.”
Dave Zuchowski, executive vice president of sales for Hyundai Motor America
Sensing the lucrative business, more local dealers are attracted to Hyundai and its affiliate Kia Motors. According to the carmaker, the number of dealerships for the two brands has surged 30 percent from 984 in 2008 to 1,277 this year.
There was a time when Hyundai offered generous incentives, including cash rebates, as part of its desperate efforts to lure picky U.S. customers. The incentives sometimes doubled those of Toyota.
A customer talks with a salesperson at Tustin Hyundai, a Hyundai Motor dealer in Orange County, California.(Hyundai Motor)
But now the Korean carmaker spends an average of $1,338 per car in customer incentives ― the lowest level in the industry, compared to Toyota’s $1,665.
“Customer satisfaction levels, value propositions and fuel savings that we offer in the market are all amongst the best within the industry,” Zuchowski said, adding that evolving style, among other things, has also played a key role in fueling growth.
The Korean duo now sells more than 1 million cars a year in the all-important market and is the sixth-largest carmaker with a market share of 8.1 percent.
More recently, however, their combined market share is being gobbled up by Japanese and Detroit rivals that are fast recovering from sluggish sales amid a sales boom in the overall market.
In October, Hyundai-Kia’s market share fell to 7.7 percent from 8.5 percent a year earlier, while Japanese carmakers maintained a strong 35.9 percent share and the Detroit Three elevated their dominance from 44.8 percent to 46.2 percent.
But the U.S. sales chief dismissed any sense of crisis looming, saying that supply constraints, not the brand itself, affected the carmaker’s recent slowing sales.
“Hyundai is growing very fast, but production on a global basis is very constrained. We haven’t been able to build as many cars as the market has demanded,” he said.
His confidence also comes from the growing popularity of its premium models such as the Genesis and Equus. The Genesis, whose revamped next-generation model will be launched this month, has sold almost 100,000 units since its U.S. debut in 2008.
According to him, consumers are eyeing luxury cars again and want something different from the traditional luxury that German and Japanese carmakers have defined ― which means more opportunity for Hyundai.
In a Hyundai survey, more than 20 percent of Genesis buyers in the U.S. were former owners of premium brands like BMW, Cadillac and Lexus.
Zuchowski predicted another 3 to 4 percent growth to sell some 800,000 vehicles next year for the Hyundai brand alone, while the industry overall is expected to see a moderate 2 percent growth.
By Lee Ji-yoon, Korea Herald correspondent
(jylee@heraldcorp.com)