By on October 22, 2010

As we’ve noted before, Hyundai and Kia have been quick to exploit the weakness of the domestic auto industry by advertising their American-made cars as American-made cars. Now, they’re taking the attack to a whole new level, as Hyundai USA President John Krafcik tells CNN Money that his brand will build 80 percent of its vehicles in the United States by next year. If the Korean brand can actually achieve that goal, it would make Hyundai’s lineup the most American-built full line on the market. And though he insists that Hyundai doesn’t make decisions about production based on PR, Krafcik can’t help but twist the knife, saying

I’m going to build my three best selling cars in the US. Ford builds its best selling car in Mexico.

Oh snap!

Ford’s rebuttal to Krafcik’s slam was measured, if not entirely responsive, with spokesman John Stoll saying

I think we’re encouraged that, overall, American manufacturing is competitive

Ford wouldn’t give an exact number for its US assembly percentage, but conceded that it was less than 80 percent. Chrysler was similarly reticent on the issue, but given its large Canadian manufacturing footprint, CNN Money reckons the Pentastar builds far less than 80 percent of its vehicles in the United States. GM admitted that it manufactures only “60 to 70 percent” of its vehicles here in the USA.

That would appear to put Hyundai on course for becoming the most domestic automaker in America (in terms of final assembly)… as long as it actually meets its goal. But wait, says JD Power analyst Jeff Schuster:

I don’t have it at 80%. I have it closer to 70%

Schuster explains that Hyundai’s forthcoming US-built Santa Fe and Elantra will have to experience sales gains similar to the Sonata’s recent surge in order to hit Krafcik’s projection. Besides, even if GM only built 60 percent of its US sales in the US, it would still have built triple the volume that Hyundai expects to build here next year. Still, with Hyundai’s products enjoying critical and commercial success right now, a market-topping percentage of US-built cars is just icing on an already-tasty cake. And as Krafcik reminds us, the old-fashioned benefits of “build ‘em where you sell ‘em,” namely production flexibility and currency stability, haven’t gone away either.

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23 Comments on “Hyundai: The Domestic Diva?...”


  • avatar
    Amendment X

    ……COGNITIVE DISSONANCE…..

  • avatar
    stryker1

    So, How long before we get to bitch about Hyundai growing too fast, decontenting their cars etc.. and marvel out how the chinese imports are eating their lunch.

    • 0 avatar
      ash78

      I think Hyundai knows that’ll happen, too. Since everything’s on a compressed schedule now, I’d say the Koreans will be unseated by the Chinese in 1/3 of the time it took the Japanese to be unseated by the Koreans. 10 years from now?
       
      I hope it doesn’t happen, but you can’t fight our desire for cheapness. It already shows in current models from high-quality brands. Longevity is not a big trait in most passenger cars, so if China can build a car that will fall apart in 5 years instead of the usual 6, and sell it for 20% less, they have a winner.

    • 0 avatar
      N8iveVA

      ash78.

      How have the Japanese been unseated by the Koreans?  Yes Hyundai has made huge strides in quality and resulting sales, but keep in mind they still only sold 435K cars in the US for 09, while Toyota alone sold 1.7m here last year.

    • 0 avatar
      ash78

      @N8iveVA
       
      I’m speaking not in terms of volume (yet), but in terms of how surprisingly and how quickly the Sonata, as well as most other Hyundai/Kia vehicles, have become the best values in their class, nearly across the board.
       
      When I say “unseated,” I mean “beating the Japanese at the very game the Japanese invented.” There some subjectivity in there, but if I were at Toyota or Honda right now, I’d be a little afraid. Nissan, too…

  • avatar

    Dennis Kucinich ran into Ford’s Hecho in Mexico problem when he bought his second Focus. Here is TTAC’s account of that episode:
    “My first priority was to get a union-made American car,” he said of the Focuses. Only his alert mind saved him from hecho en Mexico. Kucinich’s brother, Gary, of John Lance Ford, in Westlake, outside of Cleveland, had practically completed the purchasing paperwork for the current purchase when Kucinich asked him to check the VIN to make sure the car was made in the U.S. It wasn’t. So Dennis made poor Gary find a domestically made Focus and redo the paperwork. It’s tough when your brother is such an idealist.
    See   http://www.thetruthaboutcars.com/2009/11/the-candidates-choice/
     

  • avatar

    “I think we’re encouraged that, overall, American manufacturing is competitive.”

    Think Stoll was under orders to NOT add the obvious, “when you don’t have to grovel to the UAW?”

  • avatar
    TrailerTrash

    Hold on…just a moment.

    The total is a big deal, even if many refuse to look at it.
    IF Ford, or any large manufacturer, builds a hundred thousand more vehicles in the US than Hyundai, then the Hyubdai percentage game is silly.
    This is beginning to be stupid.

    Use this in your advertising or political ad, but the B&B should be better.

    If the 60 or 70 percent (should they ever reach it) still pales in comparison to the competition…why even talk about it?

    • 0 avatar
      ash78

      It’s sort of like profit margin vs volume. Honda and Porsche are known for their consistently good margins, but volume is often much smaller than GM or Ford or Toyota.
       
      So yes, the net effect of higher volume means that Ford would “benefit America” more overall, but Hyundai is showing a better rate of providing US-made content, and is therefore more successful on that particular metric.

    • 0 avatar
      bd2

      The point is that Hyundai seems to be making more of an effort to ensure that most of their cars sold in the US are assembled in the US, irrespective of total nos.

      Hyundai very well could have built their factory in Mexico instead of Alabama, but they didn’t.

  • avatar
    V572625694

    Wouldn’t everybody–from the UAW to Steve Rattner–be better off if we quit splitting hairs about what Made in USA means? The 50s, and all those high-paying assembly-line jobs that paid for working-class kids to go to college, aren’t going to come back to the US, beneficial as that might be.
    “Splitting hairs” includes:
    1. Calling cars made in Canada, but not Mexico, “American made.”
    2. Arguing that Toyota et. al. only export “screwdriver jobs”  to the US, instead of “real” automobile manufacturing, which I guess would include foundries casting engine blocks.
     
     

  • avatar
    Educator(of teachers)Dan

    Don’t worry everybody, we’ll be the cheap labor market like Mexico/China is very soon.

  • avatar
    dwford

    I don’t see how Hyundai gets to 80% of sales built in the US. Santa Fe capacity was constrained at Montgomery by the Sonata, but should be ok now that it comes from West Point, GA. So now Hyundai puts a higher volume car – the Elantra into Montgomery. How does that work? I see some Elantras still coming from Korea, unless Hyundai plans to expand the plant or build another one.

  • avatar
    Blobinski

    I think the point is this – take a look at a company that made a complete POS in 1990 to now.  It was made overseas in Korea and was a pile.  Look at them now.  You can make all the excuses in the world concerning why GM and Ford are not doing as well or as successful lately, the denegrating comments about only doing assembly here, etc.  They came to the USA and have kicked tail over the domestic companies.  Why doesn’t criticizing Hyundai, a major USA manufacturer and employer, get the same negative response as when someone bashes the domestic car companies?

    I like their cars and will continue to support them.  The Sonata Turbo should be a great car.

  • avatar
    gslippy

    “…his brand will build 80 percent of its vehicles in the United States by next year”
     
    No matter; he still can’t use the UAW parking lot because a Hyundai is ‘foreign’, and a Mexican-built Ford is not.


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