By on August 12, 2017

2017 Hyundai Tucson - Image: HyundaiHyundai’s U.S. sales volume is down 13 percent through the first seven months of 2017, a year-over-year drop valued at 60,203 lost sales. Hyundai has fallen so quickly that its corporate partner, Kia, has managed to outsell Hyundai in America in each of the last three months.

But even with Hyundai sales falling nearly five times faster than the industry at large, and even with the two most popular products in the lineup — Elantra and Sonata — causing a 23-percent downturn in Hyundai passenger car sales, there’s good news to be heard out of Hyundai’s (shrinking) corner of the market.

The third-generation Tucson launched two years ago is a verifiable hit. Sales are perpetually rising. July 2017, in fact, was its best month ever.

But there’s bad news. Hyundai can’t get nearly enough Tucsons shipped across the Pacific from the compact crossover’s Ulsan, South Korea, assembly plant.

“We have the capacity to sell many more of those,” Hyundai Motor America’s vice president for planning tells Wards Auto. “Our biggest problem is not nearly enough of them. We’ve been suffering that since the very beginning.”

Hyundai’s U.S. dealers are obviously getting their hands on more Tucsons now than they were. Indeed, O’Brien says U.S. allocation has been increasing. But a vehicle such as the Tucson that’s routinely attracting more than 10,000 U.S. buyers per month would ideally have inventory of 25,000-30,000 copies in stock to maximize consumer selection and meet future demand. According to Cars.com, even with Tucson supply improving, there are fewer than 22,000 Tucsons in stock in the U.S.

Even in-demand vehicles suffer when selection is poor.

The Tucson nevertheless accounts for 16 percent of Hyundai’s year-to-date sales, up from 11 percent in the same period one year ago. Already, in only seven months, Hyundai has sold 62,964 copies of the Tucson, more than in any entire calendar year prior to this model’s launch. Hyundai is on track to sell 112,000 Tucsons in 2017 if the 25-percent rate of growth holds for the rest of the year. That’s more than double the number of Tucsons sold in America only three years ago.

Yet it could be better.

Hyundai remains cautious about the SUVs-Are-The-Answer theories of amateur automotive product planners. Hyundai is beginning to see similar levels of incentivization required to sell utility vehicles and cars, for example, while the general decline of the industry is going to increase competitiveness, an arena in which more utility vehicles will fall by the wayside.

The Tucson, however, appears to be in no danger. Hyundai’s smallest utility vehicle, at least until the Kona arrives next year with limited volume potential, is America’s 22nd-best-selling utility vehicle so far this year, ahead of the Jeep Renegade and Kia Sorento but behind the Honda Pilot and Dodge Journey.

[Image: Hyundai Motor America]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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22 Comments on “The Tucson Is Hyundai’s Current U.S. Success Story, but Inventory Problems Are Restricting That Success...”


  • avatar
    Vulpine

    When is Hyundai going to bring us the Santa Cruz pickup? They need a player in the game and to be quite honest, this stands a chance of opening an all new market segment for compact trucks.

    • 0 avatar
      spookiness

      I’ve always thought there was a point where a Kia Soul pickup, or a pickup resembling a Soul, could have sold like gangbusters. Might be past that. Not sure.

  • avatar
    dwford

    Tucson inventory has been a problem for 10 years. Why Hyundai management can’t understand crossover demand is beyond me.

    • 0 avatar
      SCE to AUX

      Truly. The US dealers must be fed up.

    • 0 avatar
      bd2

      Been saying this for years.

      The previous gen model (which I didn’t like at all) only sold 49k at its sales height due to limited supply.

      With the current Tucson, Hyundai increased US supply where sales rose to 90k last year and should break 100k for 2017, but that’s still not enough and pales in comparison the # of RAV-4s, CR-Vs and Rogues, Toyota, Honda an Nissan can pump out.

      Hyundai could easily sell 150k Tucsons (which is far from the 380-390k in sales that the Japanese are on track for, but have to account for Sportage sales and the Koreans being smaller vehicles), but Hyundai, despite increasing production for the current model didn’t account for how popular the Tucson was going to be around the world (for instance, is a big seller in Europe and Australia).

      And Hyundai is making the same mistake with the upcoming subcompact Kona – only allocating 40k for the US market which equates to an average of 4 Kona sales/month for every Hyundai dealership in the US.

      Part of this is due to total production of the Kona only being 200k (Europe is getting a bigger share) due to lack of space at Hyundai’s huge production facilities at Ulsan.

      And this is on top of Hyundai delaying the Kona in order to do a subcompact CUV for the BRIC nations first (which was a mistake) and not making the Ioniq into a crossover body-style like what Kia did with the Niro.

      They also should have fast-tracked the Santa Cruz.

  • avatar
    SCE to AUX

    I’d be interesting in a “Top 10 vs Bottom 10” days-of-inventory list for today’s crop of cars and trucks (meaning shortest vs longest).

    I’d guess the Tucson isn’t the most inventory-short vehicle out there, but it’s notable due to the high demand segment it’s in.

  • avatar
    xtoyota

    What shortage
    Madison,WI have 80 in stock…always had a good inventory..
    Typical Hyundai spin

    • 0 avatar
      bd2

      “Spin” would be cherry-picking #s.

      How a particular brand or model sells can vary widely from one location to another.

      There are around 20k (according to Autotrader) Tucsons in stock nationwide.

      In comparison, there are over 51k Nissan Rogue and Rogue Sports in stock.

  • avatar
    S197GT

    in my area you can have any hyundai vehicle you want… as long as it is in the color white or black.

  • avatar
    stingray65

    Better buy your S. Korea sourced Hyundai ASAP before the NORKs invade to bring the worker’s paradise to the south.

  • avatar

    Kia has more appeal to the blue collar masses. Hyundai design is way over the top, tries to be something it isn’t.
    Sitting in a Hyundai and looking at those dashes… what a carnival.

    • 0 avatar
      bd2

      Not so much on the outside now.

      And actually, the opposite is true – Kia, for a certain segment of its buyers, has appealed to a higher level of buyer.

      Buyer demand actually brought about the SX-L trim for Kia, something that Hyundai doesn’t have the equivalent of – which is why the Optima has had a higher ATP than the Sonata.

  • avatar
    Corollaman

    There are 40 to choose from within 10 miles from Miami, fl. what shortage are you referring to?

  • avatar
    Krachet1634

    Thus article is horrendous. In central Massachusetts the Hyundai dealer down the road has 32 in stock. Kia dealership down the road has 36 Sportages in stock. These are both small dealers. Should i google some of the bigger dealers close to Boston? There is opinion and then there are the facts. Neither of which are correct here.

  • avatar

    There seems to be a trend lately of major car companies surpassing GM in market share. How long will it be until Hyundai surpasses GM in international market share. I would predict it will happen in five years. It depends on how much more product line Barra cuts.

  • avatar
    hamish42

    My sister recently bought a Tucson. She wasn’t overly impressed with the car – she thought that there was very little to choose between it and its competitors. However, In Canada, Hyundai offer a 5 year 100,000 km (60K miles) warranty plus lots of corrosion protection, which is important to us here in Toronto Road Salt Capital of the World.. It’s the best in its class and as a single mom she felt that the extra 2 years of warranty coverage tipped the scales. So, they didn’t really sell her a car. They sold her a warranty that was better than anyone else’s and that worked for her. The others offered 3 year 60,000 km (35K miles).

  • avatar
    gman1023

    I sell for a Hyundai dealer in Western PA. Our inventory is pretty strong on Tucsons at the moment, but they’ve also been the #1 driver of August sales for us so far. Lots of people here think they need AWD and the Tucson is Hyundai’s cheapest option in that arena. As such, the SE sells very well, the new SE Plus packaging sells decently well and everything else lags. I personally am excited for the debut of the Kona. At that price point, I think it will do well despite being butt ugly. Another note on the Tucson is that it’s by far our store’s lowest average days in inventory among volume models, and very possibly overall (Ioniq is the only one I can think of that may beat it).

  • avatar
    sportyaccordy

    I hope they make an N version of this with the 2.0T and DCT.

  • avatar
    saturnotaku

    I own a 2017 Tucson with the 1.6T/DCT combo. It’s a fine little CUV with lots of passenger room and is surprisingly fun to drive…at least when you can get the transmission to cooperate. Aside from supply problems, the DCT is this vehicle’s Achilles heel. Lots of complaints on owner’s boards about delayed or even no acceleration. From my experience, the claims are not without merit. While I’ve never experienced a “no-go” situation, I have seen plenty of stuttering in stop-and-go traffic, as well as inconsistent throttle response. A lawsuit alleging design defects in the transmission control module was filed on behalf of owners of the Tucson and other Hyundai vehicles with the DCT (Elantra, Sonata, Veloster).

    http://www.hyundaidctlawsuit.com/


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