Tale of Two Countries: U.S. Finds Itself With Oversupply of Hyundai Model

South Korea moved swiftly to counter a coronavirus outbreak back in February, soon becoming a best-case example for other countries to follow. While domestic auto production was mildly hampered by the outbreak, and further impacted by supply chain issues originating in hard-hit China, output has barely flagged.

In the case of one popular compact crossover, perhaps Hyundai should have turned off the taps for a bit.

As reported by Reuters, too many units of the normally popular Tucson are piling up at U.S. ports, wallflowers in a nearly shuttered industry that’s only just now trying to get back on its feet.

Roaring out of the virus scare and anticipating normal overseas demand, Hyundai output in South Korea reached 98 percent of capacity in March, with the U.S. — a huge market for the automaker — receiving a greater than normal amount of vehicles last month. Shipments to the U.S. rose 4.3 percent, year over year, in March… just in time for lockdown measures in most U.S. states and the shuttering of dealer operations almost from coast to coast.

Suffice it to say there wasn’t a flood of buyers entering Hyundai showrooms in March, which explains why the healthy shipments of overseas-built models are clogging port facilities. As the brand’s best-selling model, the Tucson is over-represented in this slow-to-drain backlog, sources claim.

Hyundai has since idled its domestic Tucson line as it braces for an unhealthy first-quarter earnings report. April output in South Korea is expected to decline significantly as the company matches production with demand. However, last week’s assembly shutdown will do nothing for the glut of existing models U.S. dealerships don’t need.

“I hope that the situation will recover by the middle of next month. If not, we might have to lay off some people,” Brad Cannon, general manager of a California Hyundai dealership, told Reuters. The dealership’s sales are off 50 percent from pre-pandemic levels, he added.

Hyundai’s U.S. manufacturing sites are expected to get back to work in early May, though consumer demand moving forward is anyone’s guess. Most, if not all, automakers are readying for a bad sales year. On a brighter note, sometime later this year those same buyers will be able to take a peek at the next-generation Tucson, which arrives for 2021 with a new platform and less anonymous styling.

[Image: Hyundai]