By on December 28, 2016

Hyundai Tucson, Image: Hyundai

Once a juggernaut, Hyundai’s recent sales and financial performance hasn’t kept pace with its lofty post-recession boom. The automaker now finds itself in one of the weakest positions in the industry for growth, all thanks to rising costs and a product lineup that doesn’t meet consumer demand.

To patch the holes and regain momentum, Hyundai has taken on some seemingly desperate cost-cutting measures. In this all-out scramble for profits, last week’s firing of its American CEO is just the tip of the iceberg.

According to Reuters, Hyundai is on course for a fourth straight year of profit decline. Costs are creeping up, now equal to 81 percent of revenue. Meanwhile, global sales estimates for 2017 have taken a haircut, from 8.35 million to 8.2 million, while 2016 sales could decline for the first time this century.

Because of a powerful, strike-happy autoworkers’ union, any changes in the personnel file needs to happen at the top, and that means a far less plush life for executives. It shouldn’t come as a shock to the upper echelon, as their ranks swelled 44 percent in the past five years. A 10-percent October pay cut for execs doesn’t fix the problem, but it’s something.

Executives must now cut back on travel expenses, company insiders tell Reuters, meaning fewer business trips, low-rent hotel rooms and coach class airline seats. Veal and chardonnay? Maybe if you’re lucky, pal. In other nitty-gritty areas, Hyundai has dialed back printing and lighting costs where possible.

“We’re in emergency management mode,” said one unnamed source.

While this sounds dire, the automaker still has ample cash in the bank, but there’s no escaping the reason for the cutbacks — a car-heavy lineup rebuffed by the public’s rapid shift to utility vehicles. Hyundai needs more SUVs in a hurry. Already, perhaps belatedly, there’s work on that front. In the U.S., Hyundai plans to expand its utility lineup with two smaller models, push the Tucson and Santa Fe Sport slightly up in size, and rename the top-shelf Santa Fe.

Other boxes on the checklist include bringing a redesigned Sonata sedan to market, pushing higher-end models (including those found in its Genesis brand), and delivering fewer vehicles to low-volume overseas markets.

The 2017 Elantra received good reviews and has since added Eco and turbocharged Sport variants, but the Honda Civic leads the compact class. There’s a chance that could change. Luc Donckerwolke, Hyundai’s senior vice president for design, claims next-generation models with “a different flair” are on the way.

While consumers will buy just about anything with all-wheel drive and a liftgate, watching Hyundai tackle Honda in a design duel should be interesting to watch.

[Image: Hyundai Motor America]

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103 Comments on “Cancel the Room Service: Hyundai Pulls out All the Stops to Right a Leaky Ship...”


  • avatar
    DeadWeight

    HYUNDAI/KIA have lost THEIR COMPARATIVE/COMPETITVE ADVANTAGE OVER HONDA, TOYOTA and most others they compete with, to wit, PRICE.

    To make matters worse, their suspension tunjng is still “off,” they are not as reliable/durable as the better Toyotas and Hondas that are now no more expensive as the Hyundai competition (why pay 100% of the price for 85% of the reliability), and their dealerships are horrible in terms of the sales experience and in honoring (or more accurately, finding any excuse, however lame and unethical, in attempting to deny) warranty claims, and their exterior designs grow more hideously close to Nissan with each passing day.

    But bd2, who sells them, will be along soon to educate the world about how Hyundai/Kia manufacturer superior vehicles to just about any other make, how they perform AWESOMELY, and how he’s seen lowly Rios and Accents with 578,000 miles on the odomoter that look like they just left the assembly line and smell of raspberries, clove and ginger.

    • 0 avatar
      Jack Denver

      JD Power puts Sonata ahead of Camry and Accord in reliability:

      http://www.jdpower.com/cars/study/2016-Vehicle-Dependability-Study-%28VDS%29-by-Category/843ENG/Midsize-Car/1098

      Hyundai keeps getting better while Toyota and Honda ain’t what they used to be. You have to look at the reality NOW and not give a brand credit for past glory (or ding them for past failure). You are buying the vehicles that they are making NOW and not what they used to make 10 years ago.

      Keep in mind also Hyundai’s best in class warranty – if something goes wrong, it’s going to be on Hyundai’s dime for a long time.

      • 0 avatar
        DeadWeight

        JD Powers is an industry whore and a joke in more ways than I care to recite.

        • 0 avatar
          Jacques

          So smart man if Hyundai is so bad please explain how a German car rating agency rated it as best above its own so Called premium brands… You own a German car and are so upset by the progress the Koreans have made so you bash them.

          http://www.vanguardngr.com/2016/12/hyundai-ranks-high-2016-auto-bilds-quality-report/

          I quote from Wikipedia

          “Development and design

          Hyundai Genesis Concept
          Introduced in March 2007 as the “Concept Genesis”, the sedan was designed by Hyundai as a “progressive interpretation of the modern rear-wheel drive sports sedan”.[12] Hyundai conceived the idea for the Genesis in 2003. The body design took three years and the total cost of the program was $500 million over a development period of 23 months. Reliability testing ran for 800,000 miles.[13]
          Hyundai reportedly benchmarked the BMW 5-Series (E60) sedan during the Genesis’ development; the company’s press release indicates the Genesis body in white exceeds the BMW in torsional rigidity by 14%.[14] The production Genesis sedan received a five-star crash rating in every category from the National Highway Traffic Safety Administration.[15][16] Hyundai markets the Genesis as offering “the performance of a BMW 5-Series and the interior packaging of a 7-Series at the price of a 3-Series”.[17]
          Reviewing the Genesis 4.6 at its US introduction, automotive journalist Dan Neil called the absence of brand emblems at the front of the Genesis “a move that subverts the grammar of luxury”.”

          • 0 avatar
            RedRocket

            See my comment in Hyundai’s “hospitality” budget. They buy good press by the bushel basket. No facts are typically harmed in the making of a positive story.

        • 0 avatar
          Bawroski

          Ditto on the JD Power issue. JD Power does not look at long term reliability.

        • 0 avatar
          dantes_inferno

          >JD Powers is an industry whore and a joke in more ways than I care to recite.

          JD Power gives whores a bad name.

        • 0 avatar
          bd2

          Um, not just JD Power, but Consumer Reports and Germany’s AutoBild.

          Sorry, but you have ZERO leg to stand on.

      • 0 avatar
        scottcom36

        I’m sure for the first 100,000 miles Hyundai reliability is comparable to Toyota/Honda. For the miles beyond that, I’d guess the latter have a significant edge.

      • 0 avatar
        thornmark

        Just motortrending, but isn’t JDPower an outfit that ranks by the amount of biz$$ they get?

        Or is that just internet buzz?

    • 0 avatar
      Trucky McTruckface

      This. I was interested in getting a Tuscon until I saw how laughable the pricing was. If anything, a comparable Honda is priced slightly lower. Hyundai’s year end incentives, even on leftover ’16s, are lousy. If Carmax is any guide, the traditional Hyundai cliff-face depreciation remains and the only way to make the purchase palatable is massive discounts up front. Without that, no sale.

      Then there’s the new Hyundai dual-clutch gearbox that apparently gets confused between gears. Supposedly it’s fixed now, but I’ve heard too many horror stories about unhonored warranty claims.

      • 0 avatar
        2manycars

        Friends of mine who were long-time Hyundai customers (since about 2000) have purchased a Subaru Outback this time out. They said it was more appealing to them than any of Hyundai’s current offerings. (I see the Outback as a station wagon, but apparently they’re called “crossovers” now.)

    • 0 avatar
      VW4motion

      Hyundai is probably building there best products right now but they forgot about the interiors and out of control pricing. A few months ago the wife and I test drove a new Santa Fe Sport. OK suv but the interiors looked like a ten year old design and price was $44,000. We could not stop laughing at the price. It truly looked and drove like an suv under $30k. They also had loaded Tucson’s for $34k. Complete joke especially if you research the resale value of a 6 year old Hyundai.
      KIA on the other hand is building some the best interiors on the market. Hyundai just got lost.

    • 0 avatar
      Felix Hoenikker

      Agreed,
      The local HK dealers here are only slightly evolved from the pond scum from which they emerged. They aspire to sleazy, but that is a big step up.

    • 0 avatar
      richmich7

      Exactly. In addition they have decided they are as good as Honda and Toyota with a better warranty. The subprime customers that flocked to them in the past are now going to Nissan for a deal. Unfortunately, Nissans aren’t what they used to be.

    • 0 avatar
      FreedMike

      +1 on the dealership comment. The ones I visited last month were very much in old-school, four-square mode. That doesn’t work well with a buyer like me (i.e., not 23, not employed at Target, not someone with 570 credit). The *asking* prices are high, but the *transaction* prices are ridiculously lower. It’s blue-light-special-time, all the way.

      http://www.arapahoehyundai.com/new/Hyundai/2017-Hyundai-Elantra-c07773010a0e0ae717548d63e640efba.htm

      The product, I’d say, is more undistinguished than low-quality. My girlfriend is on her third Hyundai (currently owns two Accents, an ’09 and a ’13), and they’ve all been solid from a reliability and quality standpoint. Her experience has been good enough that I gave Hyundai a try on my recent car buy. But the Elantra I drove was just not *involving*. It was certainly competent enough, and the infotainment system is probably best-in-class. It was like a more refined, less junky-feeling Corolla. But the problem is this: Toyota can get away with selling bland, warmed-over-2005-platform Corollas because they’re Corollas. Hyundai can’t do the same thing.

      The product needs some “pop.” And the dealerships need to move away from the “screamin’ deals from high-pressure salesmen now” model if they want to get more affluent buyers in the door.

    • 0 avatar
      Bawroski

      I have to agree about the suspension issues being the owner of a 2011 Elantra. I love the car but the steering and suspension is terrible.

    • 0 avatar
      bd2

      Again, DW with his gross misstatements.

      Kia is top 5 in CR’s reliability (and both H/K being ranked higher than Honda, much less Acura) and the suspension tuning on the latest H/K models are well done (still need to work on steering feel, but overseas reviews of the Elantra Sport have been promising).

      Hyundai’s biggest problem is the painstakingly slow movement by the top execs in not only expanding their crossover lineup, but also increasing supply of the crossovers they do have (for instance, Tucson sales have basically doubled as they allotted more supply to the US market, but still not enough); only other automaker which has been as slow has been VW.

      Part of that was Hyundai execs being too infatuated with the China market – which is why the China and India markets got a subcompact crossover (Creta/ix35) before the US and European markets which will have to wait until 2017.

      Another misstep was going with a liftback bodystyle for the Ioniq whereas Kia went with a crossover bodystyle with the Niro – which, not surprisingly, has proven to be more popular of the 2 in the markets where it is currently available (Korea, Europe).

      This is reminiscent of Kia going with the “box-ute” bodystyle for the Soul whereas Hyundai went with a 4-door hatch in the Veloster.

      Hyundai/Genesis has 4 new crossovers on the way, but that’s a lot of sales lost due to not having the right product mix, much less the lack of supply (for instance, Toyota, Honda and Nissan can pump out more RAV-4s, CR-Vs and Rogues, respectively, than Hyundai can of the Tucson and Santa Fe Sport/SF combined).

      Still need a proper full-size crossover (the 3-row Santa Fe will grow in size and be renamed) and Hyundai should have fast-tracked the approval of the Santa Cruz pick-up.

      It’s not like the turn to crossovers is a North American thing – Europe, Korea and even China nowadays have been seeing buyers moving to crossovers and SUVs.

    • 0 avatar
      raast

      This assessment is spot-on.
      H/K price points relative to roi are no longer advantageous. The depreciation is more rapid than some of the competition, still.

      The dealerships (personal experience) that went out of their way to look after you suddenly decided that profit-above-all was the priority, not customer service. Check out Kia’s interior lighting issues where the dealer service dept claim no knowledge of the diode/harness issue. Check out how many warranty claims are reported as being denied online, particularly engine failures. H/K service intervals are extremely short – they seem to be designed to claw back or just plain gouge. In Canada anyway, those service intervals are based on ‘severe service’ intervals, which the dealer (more than one) insists on to ‘ensure warranty coverage’. The more I read about their corporate culture, the less confidence I have in their products.

      A colleague just bought a brand new Tucson that has some sort of issue with the lane change warning system. The dealer cannot fix it and wants the car for days to ‘tear everything apart’ – this was declined and owner will live with things as they are.

      I consider myself fortunate not to have had any warranty related issues, but the mileage was low. The dreaded suspension ‘clunk’ was starting to become apparent. I traded for a Japanese vehicle, and from what I’m seeing, none too soon.

  • avatar
    SoCalMikester

    ok, so how close are they tied to kia? maybe a complete merger and reconfiguration is needed? ive got nothing against either brand, but maybe 2 similar brands is one too many?

    • 0 avatar
      slavuta

      Kia already announced that they moving into “sporty” car business while Hyundai will do the “softies”.

      • 0 avatar
        HotPotato

        They better work on that ride quality then. Rented a new Elantra over Xmas vacation. Even on glass-smooth Vegas roads, and even with base-model high-profile tires, the ride was flinty. Not Veloster level rough, and I get that the competitive Civic is no marshmallow either, but sheesh, a little wheel travel wouldn’t hurt anyone.

        The Santa Fe Sport, on the other hand, rides like a champ. Maybe it’s those big cushy SUV sidewalls, but no complaints.

    • 0 avatar
      S2k Chris

      It does beg the question, if margins are tight and they’re cutting exec’s pay, etc, if they should be spending so much on A) keeping Hyundai and Kia both afloat and stocked with cars, and B) spending so much opening a third brand which I simply can’t see being anything but an also-ran. Basically anything that isn’t a Mercedes, BMW, and MAYBE Audi over $50k is a bit player. Even nameplates like Lexus and Jaguar are scrambling for crumbs, and Hyundai is going to profitably launch a whole new brand and infrastructure?

    • 0 avatar

      Hyundai and Kia are in the same company much in the way Cadillac and Chevrolet are part of General Motors. This wasn’t always the case. They have different companies handling importation and distribution in the US because the importers were once dealing with separate entities.

  • avatar
    Jack Denver

    I don’t have the feeling that the Genesis brand thing is going to work. They have a chicken and egg problems – the Genesis brand doesn’t do enough volume to support a freestanding dealership but unless they have freestanding dealership (maybe even if they do) they are never going to achieve the necessary volume, especially with their current lineup of exactly 2 sedans. They are going to need one or more Genesis SUV’s at a minimum.

    About a month ago, I got a leftover 2016 Genesis sedan for crazy cheap – less than you’d pay for a loaded Camry. So I would have bought it off the back of a pickup truck for that price. But if I was paying full price, I could see that a Hyundai dealership is very different than a Lexus dealership. The salesman I happed to draw was a nice guy and didn’t try to sell me key replacement insurance and other worthless crap, but sitting at the next desk was a fat guy with a toupee who was flogging all that stuff and lying his head off to the buyers. But what was worse (from the POV of a luxury dealership) was the rest of the customer base. These were folks hoping that their credit was good enough for them to qualify for a stripped Accent. They seemed like fine salt of the earth people but not the people you want hanging around your luxury car dealership – it was like WalMart meets Neiman Marcus.

    • 0 avatar
      Trucky McTruckface

      Hyundai stores strike me as being slightly less pathetic than Kia stores, but they definitely haven’t improved at the same pace as the product. If they want Genesis to be taken seriously, they need to upgrade their dealership standards…fast.

    • 0 avatar
      dwford

      The Genesis brand has a 3rd sedan coming next year, as well as some crossovers. In 2 years they will have a full lineup. Remember that back in the 80’s Lexus launched with the ES Camry clone and the LS, and that was it.

      • 0 avatar
        S2k Chris

        In the 80s Lexus captured a huge swath of people who were hacked off by the German arrogance and (relative) junk products, reliability-wise, and crazy-high prices. An E-class was about $35k in 1985 prices which is $79k today. A 1989 560SEL was on a platform released in 1979, and in 1989 it sold for around $60k, which is $117k in today’s money. An LS400 from the same era was around $35k.

        Today, there simply isn’t that much arbitrage to be had between luxury brands; the ownership picture isn’t as bleak and the dollar spreads aren’t nearly as vast. Hyundai simply doesn’t have the same market conditions to capitalize on that Lexus did in 1990.

        • 0 avatar
          thornmark

          Luxury brands seem to have hit a wall in sales and are increasingly resorting to discounting – which also kills the “premium” aura. While adding lower priced models further diluting brand equity.

          Meanwhile, mainstream brands are moving up in price and content. The Genesis seems to be in the middle/muddle of these market forces for better or worse.

          Personally, I don’t care about expensive dealer ambiance any more than I care about Costco or Aldi ambiance as they deliver superior product at a superior price.

          I figure a well crafted car should not be seeing much dealer action anyway. That’s the dealer experience I want – the luxury of not being there/doing that.

        • 0 avatar
          bd2

          However, there is still a sizeable luxury market who are being priced out by the Germans (with the ever increasing cost of the latest tech) and don’t want a cheaper FWD option.

          Would not be surprised once Genesis gets its full lineup, that it sells about as well as Acura, if not surpass them.

  • avatar
    LS1Fan

    Hyundai needs to get out of the oversaturated sedan business,but realigning production capital to make more crossovers takes time.

    In the interim, costs must be cut.

    • 0 avatar
      DeadWeight

      But even their CUVs are middling to poor in terms of quality, styling, NVH, suspension tuning, and they have no price advantage over the competition.

      The Tucson is awful, the Sportage is very unrefined, the Santa Fe is ho-hum (and expensive), and the Veracruz (if that’s a thing still) is like a ridiculously cheaply made RX350 knock-off.

      • 0 avatar
        Trucky McTruckface

        Veracruz is now the “regular” Santa Fe, while the five seat model that used to be called Santa Fe is now “Santa Fe Sport.” If you’re not confused yet, the names are supposed to change again.

      • 0 avatar
        Jack Denver

        You’re obviously not a Hyundai fan but I have a hard time believing that they sell a million vehicles a year in the US (combined H/K volume) year after year (without a single pickup truck) just by fooling people. If they are not competing on price and their vehicles suck, why are they up there with Honda and Nissan and not down with Mitsubishi? Are their ads just that good? Mass insanity? Because Americans just love Korean cars? They must be doing something…

        • 0 avatar
          OldManPants

          This. Neither H nor K are terrible; they’re just packed into the same lifeboat with so many other not-terribles and they’re closest to the gunwales ’cause they got in last.

        • 0 avatar
          JohnTaurus_3.0_AX4N

          Nobody is denying that they are doing “something” but the typical buyer and dealership experience is far closer to Mitsubishi than it is to Honda, Ford or Toyota (not that any particular one of their dealerships isn’t as bad or worse, I mean on the whole).

          They have a much larger and yes, better lineup than Mitsubishi, which explains why they are more successful.

          They’ve come a long way, nobody is denying that, but they have plenty of room for improvement in both quality and product. As DW pointed out, their somewhat inferior product isn’t as much of a value as it once was. (That may change if your credit score got you escorted out of the Honda dealer.)

          I’m considering the Kia Amanti because it is so much car for the money. I wouldn’t choose a new Elantra over a Civic for any particular reason, since the value proposition isn’t as strong and the Civic is that much better.

          The Avalon, Town Car or D3 (2008+) Taurus are “that much better” than the Amanti, but to get one of them as new/near-mileage as it is in my price range, it would probably be missing a drivetrain or something, lol, so the Kia becomes the reasonable choice.

          • 0 avatar
            28-Cars-Later

            Something, something, something, DARK SIDE.

            Oh and I like the Amanti assuming you crunched numbers and it fits your business case.

          • 0 avatar
            JohnTaurus_3.0_AX4N

            I haven’t completed it, but what I have done is encouraging. That figure you mentioned helped. But, its the intangible differences that are hard to calculate. How comfortable it is for not just a rider, but for me. Hard to put a dollar figure on that. It could be the difference between being able to do the job or not.

            I did talk to Uber Support and they gave me answers to my satisfaction, its just a matter of getting the wheels in motion. I have something lined up, its just getting it going is taking a while. Supposed to know sometime this week.

            I am aware that the Uber Support staff can be misleading, I read driver forums for a while to get an idea of what I’m going to be working with. I still believe this is the right thing to do.

            If the Amanti falls through, I do have other cars in mind. I did actually find a 2006 Accord I-4/auto with some very minor damage to a fender/driver door. It looks great otherwise. I know the owner of the local body shop, his son specializes in paintless dent repair.

            Problem is, its not close and its at the very top of what I wanted to spend, so my maintenance budget and even the trip to go get it would be stretching it very thin.

            It has cloth, I prefer leather for cleaning. But, its a Honda and not a V-6. It even has the updated rear facia (LEDs!) instead of the awful 2003-era, even though I believe there are still many far better looking Accord bodystyles.

          • 0 avatar
            28-Cars-Later

            Good point on driver comfort, I’m not familiar with KIA interiors so i don’t know if they are comfortable or not. I also wonder if Honda in MY06 is going to be much different in terms of comfort than MY06 KIA, esp the “luxo” model.

            Why not an MY07ish Lincoln Zephyr with the Duratec 3.0 (not 3.5)?

          • 0 avatar
            Arthur Dailey

            @JohnTaurus, have been reading with interest your musings regarding Uber and an Amati. May I also suggest that you look at a previous generation Rondo? Which of course are the only ones available in the U.S. They are/were widely used as cabs in Europe (sold as the Carens there and available with a diesel and a stick) and in Quebec and some smaller Ontario cities. Used the Optima underpinnings.

            With the 4 cylinder they come with a timing chain and a respectable reliability record. Were available with leather and with 7 passenger seating. Came standard with heated, 6 way adjustable front seats, lots of headroom and great visibility.

            Sold primarily at least in Ontario to retirees, young families and as fleet vehicles. If you get one from the first group you should be able to find a lightly used vehicle, well within your budget and with a considerable amount of usable life left in it.

          • 0 avatar
            JimZ

            the Amanti is the definition of a “tryhard” vehicle. Is it trying to be a Jag? Trying to be a Mercedes? Or is it trying to be a Town Car?

            Why not all three!

            “May I also suggest that you look at a previous generation Rondo? Which of course are the only ones available in the U.S”

            according to CR they’re pieces of s**t. as in they have serious hits in the individual ratings.

          • 0 avatar
            RHD

            “Amanti” is Italian for “lovers”. An apt name, as the salesman and the customer both vie to screw over the other.

            On a more serious note, was anyone even aware that Hyundai still makes the Amanti? I have seen a total of one in my town during the last seven years or so.

          • 0 avatar
            RHD

            To answer my own question, the Kia Opirus (AKA Amanti) was no longer in production as of December, 2010. It was made for a total of 7 years.
            I would imagine that they could bought for a song now, and would be a good value-for-the-money vehicle.

      • 0 avatar
        SC5door

        “The Tucson is awful, the Sportage is very unrefined, the Santa Fe is ho-hum (and expensive), and the Veracruz (if that’s a thing still) is like a ridiculously cheaply made RX350 knock-off.”

        And you haven’t driven any of them then, especially if you’re still mentioning the long dead Veracruz. You’re just spouting out the same old garbage just like before you were banned.

        • 0 avatar
          DeadWeight

          I was never banned. Your ignorance is showing.

          And I have driven the harsh new Tucson (stuck with one as a rental in Kansas City) and Santa Fe (about 3x).

          The Tucson is just plain bad, while the Santa Fe is just plain bland.

          Hyundai reached its quality and competitive peak in approx 2008-2011, coming approx within 85% of Honda/Toyota quality , and it’s been downhill since then.

          Sorry if this hurts your Hyundai-loving feelings, and triggers you.

          • 0 avatar
            sarcheer

            quality rankings would say otherwise…

          • 0 avatar
            Bawroski

            Sarcheer what quality ratings are you looking at. You might want to read about engine failures and how Hyundai just recently started hydro washing their engine blocks during manufacturing like every other manufacturer. Or the well known steering issues because on a simply plastic part that has been revised four times. Or the peeling steering wheels they keep replacing with the same material.

  • avatar
    spookiness

    Just for fun I checked a dealers Elantra online availability and pricing today, and the “Value Edition” (moonroof, blind spot, pwr seat, Auto/Carplay, LED DRL, +) seems like one of the nicest new compact car deals going. Yes, about $4k off MSRP.

  • avatar
    RedRocket

    Bad news for auto journos (along with the escorts and coke dealers) who were living off Hyundai’s “hospitality” budget.

  • avatar
    Higheriq

    Hyundai, and Kia to a greater extent, found initial success on having a decent product for a (much) lower price. They have never been perceived by buyers as being in the same league as Toyota and Honda, although the Hyundai bosses (falsely) believe they are. Now that Hyundai has priced their products similarly to Toyota and Honda, buyers are deciding that they can (and will) just buy a Toyota or Honda. Hyundai has no stand-out products, and a long warranty means little if the quality has improved to Toyota/Honda levels. Bottom-line, there is no longer a compelling reason to buy a Hyundai.

    • 0 avatar
      brettc

      That’s why we bought our Accent in 2001. For two young people in their early to mid-20s it was a brand new, affordable car with a great warranty. Fast forward to 2003 and 40K miles when the transmission control unit failed 3 times and the dealer couldn’t fix it.

      We ended up getting a Jetta TDI to replace it and I don’t have much interest in even a new Hyundai unless they bring over the i30 N.

    • 0 avatar
      slavuta

      @higheriq,

      On top of everything, it just happened that for reasons that were described here on TTAC Honda and Toyota forced discount you a car below Hyundai. And I think, Mazda is another sufferer of this fact.

      And then also, TTAC once listed Hyundai, Kia, Dodge and Nissan in “sub-prime loan sellers” column.

    • 0 avatar
      Jack Denver

      I’m not sure I understand your argument – OTOH you say that their quality is not up to Toyota/Honda standards but OTOH you say that buyers don’t care about the long warranty because they will never need it. And if Toyota/Honda quality is really that good, why don’t they offer long warranties? – it wouldn’t cost them anything if their quality was really that good.

      • 0 avatar
        jalop1991

        Bingo. And the fact is, Honda came DOWNMARKET to try to compete with Hyundai. What happened was, the playing field leveled–and Honda cars are now as crappy as Hyundai cars. It did not happen that Hyundai brought their cars up so much as Honda brought their cars down to meet that price point.

        Honda VCM. Look it up. And the talk about the “few” Accords with bad transmissions? It was ALL V6 Hondas that had junk/failed transmissions, MY98 through the middle of 05. And they didn’t fail at 250K miles, they failed at 75K miles.

        Honda can go fuck themselves with a hot poker.

      • 0 avatar
        richmich7

        Jack Denver

        It is because the car manufacturers have found their most profitable customers are those that trade every three years. That is why most leases are for three years. A lot of people don’t want to drive a car without a warranty, even if that means they are spending more each month.

    • 0 avatar
      FreedMike

      “ow that Hyundai has priced their products similarly to Toyota and Honda, buyers are deciding that they can (and will) just buy a Toyota or Honda.”

      Except…in the end they AREN’T priced like a Toyota or a Honda. Around here, you can get $4-5,000 off an Elantra, just for walking in the door. No way you get that deal on a Corolla or a Civic.

      The pricing needs to be more “real world,” versus “deal world,” if you get my meaning. Doing business like this cheapens their product, and I’d say that impression is somewhat unfair given that the product is actually quite good.

    • 0 avatar
      Snooder

      I don’t think that’s true.

      Hyundai and Kia are still cheaper than Honda and Toyota, and generally have better looks and styling.

      What’s killing Hyundai is that they didn’t see the SUV trend coming, and they just don’t have the depth there. Everyone is having a hard time selling sedans and compact cars right now, but Honda and Toyota have solid lineups of SUVs and CUVs to make up for it.

      It’s the same reason Mazda is having trouble.

      • 0 avatar
        bd2

        Mazda’s problem is trying to be the VW of old (sportier and more premium) – which has a limited customer base in the US market (but does better in other markets such as Australia, Canada and Europe).

        Mazda actually has a pretty good crossover lineup with the CX-3, CX-5 and CX-9; and there is talk of Mazda adding a 4th crossover in reviving the CX-7 nameplate.

  • avatar
    slavuta

    Will they survive? ZIL didn’t http://www.msn.com/en-us/autos/enthusiasts/the-ultimate-communist-automaker-is-dead/ar-BBxEKpT?li=BBnb4R5

  • avatar
    OldManPants

    Jeez, those Koreans… Park, Kim, Lee, Donckerwolke… can’t they come up with any other surnames?

    • 0 avatar
      orenwolf

      They have a two-thousand year history of using single-syllable generational names. But aside from that, after Japan invaded Korea and literally enforced Japanese names on the populace, the good ole’ USA (as well as us Canucks) liberated them and, as part of that liberation, Koreans took on the surnames we know today, as part of the Name Restoration Order, enacted by the United States military administration.

      It is a symbol of pride for the people and a symbol of freedom from the tyranny that the Americans themselves helped bring about.

      so no, they won’t come up with any other surnames for you, sorry. Your own family (or at least someone they knew) likely helped them fight to get the ones they have.

  • avatar
    dwford

    Hyundai’s chronic problem for at least the last 8 years has been it’s crossover availability. For the entire 6 years I sold Hyundais we would have plenty of crossovers in the summer, but the second the weather got cold, they all sold out and we would go the whole winter with virtually none. Currently the dealer I used to work at has 70 Elantras, 70 Sonatas, 24 Tucsons, 32 Santa Fe Sports, and 1 Santa Fe 7 passenger. That’s better than it ever was but still a backwards mix for December..

    • 0 avatar
      mike978

      They have plenty of crossover brands – more than Honda’s core two (CR-V and Pilot). Surely in six years they could build more! I haven’t heard of super low inventory times.

      • 0 avatar
        bd2

        Problem is that Honda can produce more CR-Vs than Hyundai can of the Tucson and Santa Fe Sport/SF combined.

        Hyundai was selling only about 41-47k Tuscons a year due to supply issues. With the new model, they increased supply where sales have basically doubled.

        But still, not even a third of what Honda can produce when it comes to the CR-V (Honda sells nearly as many HR-Vs as Hyundai does the Tucson).

        The Santa Fe Sport has seen a sales increase this year as well as Hyundai started to build the SFS at its Alabama plant mid-way thru 2016.

  • avatar
    sportyaccordy

    Whoever was behind the Genesis rollout should have got the boot first. The only luxury sedans that haven’t lost sales YTD through November in the US are the A4, XF, MKZ, and 7 series. Meanwhile the luxury crossover segment, particularly the compacts, are basically money printing operations. And this is hardly a recent development. They had Cadillac as a canary in the coal mine.

    Now they have a lineup of sedans that make the S-Class look fresh and interesting. Genesis should have been an all crossover launch.

    On the mainstream end I’m not really sure what they can do. They have full coverage crossover wise and all their crossovers are competitive and up to date. Ultimately HK is just a victim to the dominoes falling in the industry. We all know incentives are high AF… the average age of cars on the road is increasing (IOW cars are getting more durable and people are holding on to them longer)… CPO inventory is piling up and eating away at new volume (especially with CPO leasing becoming more popular)… there is just less and less reason to buy a brand new car. Anything less than a top brand or a compelling product (i.e. not a crossover) is going to have a tough time selling. So I think firing execs is a bit misguided.

  • avatar
    donutguy

    I have a 2014 Elantra SE…..paid 18.4 K for it new.

    I’m not fancy or anything, but I’ve had it for almost 3 years with absolutely no issues.

    It’s a nice car with a decent interior that gets almost 40mpg.

    I bought it to use as a commuter car and for that purpose- it’s great and for 18 K+…it’s got way better build quality+content then anything Ford, GM or Chrysler has at this price level.

    • 0 avatar
      DeadWeight

      No 9ffense, but you could have gotten an Accord, Camry, etc., for close to 19k.

      The Elantra is a decent compact, and probably one of Hyundai’s better/more reliable vehicles in a segment, but it’s actually pretty pricey, and a Civic, Cruze, Focus, etc. is more substantial and planted at higher speeds on highways, etc.

      • 0 avatar
        sportyaccordy

        None of the Camry segment cars would get 40 MPG in non hybrid trim. Plus everyone doesn’t buy cars by the lb. Some people actually prefer smaller cars. And I’ve had his Elantra as a rental. It’s fine on the highway.

      • 0 avatar
        OldManPants

        “planted at higher speeds on highways”

        Straight-faced concern over how “planted” a C-segment econoblob may be is one of the priceless merriments provided by carguy-savants.
        :-D

        How could those little roombas be anything *but* planted?

    • 0 avatar
      FreedMike

      “I have a 2014 Elantra SE…..paid 18.4 K for it new.”

      Hate to tell ya, son, but you done got played…

      http://www.arapahoehyundai.com/new/Hyundai/2017-Hyundai-Elantra-c07773010a0e0ae717548d63e640efba.htm

      • 0 avatar
        30-mile fetch

        Well, to be fair that’s an end of year firesale and Hyundai probably wasn’t as desperate in 2014 when he purchased his–that was during the zenith of the Elantra’s sales success and they are quite a bit shy of that mark in 2016.

  • avatar
    Longshift

    Hyundai/Kia needs to bring to market an SUV styled like the Kia Telluride concept and a midsized pickup based on said SUV. The concept looked great with its boxy styling, low beltlines, and big greenhouse – just the opposite of the current Hyundai CUVs, whose styling I do not like. A midsized truck would give Hyundai an entry in a profitable segment in which it does not currently compete and for which selection (and therefore competition) is very limited. I would buy a Telluride or a Telluride-based pickup, but none of Hyundai’s current vehicles interest me.

  • avatar
    SCE to AUX

    “watching Hyundai tackle Honda in a design duel should be interesting to watch”

    As a Hyundai/Kia partisan, I’d like to think that’s true, but it will be a slow-motion duel. Honda/Toyota succeed today because of quality and resale value, but also simple consumer comfort. It will take a sustained and massive effort for Hyundai to overtake Honda in any segment.

    Exhibit A is the horrendously ugly 2016 Civic, which is selling just as well as the 2015 Civic.

  • avatar
    exGensis

    As a ex Genesis Coupe owner, and recently cross-shopping for 5-7 seat SUV, Hyundai is just out of my list.

    I gave my chance to Hyundai but……

    Regarding Genesis coupe, it is fair deal…., it was within my budget and looked good on paper (200+ hp, light weight, FR, IRS, 6sp), good reliability but lacks of build quality, design, driving dynamic,………….. To make it worse, it suffered from over wear and tear, the front brake pad need to replace with 15K. In comparing, 35K-40K in my previous Ford Mustang with comparative braking power. Second thought on this, I should have gotten a used BMW 3xx.

    As for 5-7 seat SUV, Santa Fe just doesn’t stand out in any term: trunk space, power, handling, design, or price.

    Trunk space or passenger space: I would prefer Honda Pilot.

    Design: the interior design is way old dated or too odd for my taste, exterior design is OK.

    Price: as others already mention, it is way to expensive than Honda Pilot.

    My conclusion: a full 3 rows SUV, a cheap Honda Pilot for a budget 30K+, Audi Q7 2.0T if bonus is good enough.

  • avatar
    FreedMike

    I recently bought a new car and shopped Hyundai. Some observations:

    1) The pricing *looks* high, but they offer some insane deals (like this one: http://www.arapahoehyundai.com/new/Hyundai/2017-Hyundai-Elantra-c07773010a0e0ae717548d63e640efba.htm). Not sure why they wouldn’t just go to a different pricing strategy.

    2) The product (specifically, the Elantra) is competent, but it’s not inspiring to drive. Their stuff doesn’t “connect” with the driver.

    3) Dealerships were not good at all. Trying to get an email quote out of any of the ones I shopped was basically fruitless – they all wanted me to “come in and make my best deal,” and we know where that would have gone. If I were a 22-year-old assistant manger at Best Buy with a 580 credit score, that play would work. But it wasn’t going to work on a buyer like me.

    All of this would be workable, IF the product were terrific. It isn’t – it’s merely “nice.” Toyota can get away with this, because…Toyota. But these guys need better, more involving product, and soon. If they can do that, then I think the dealership issues will pretty much solve themselves.

  • avatar
    ZCD2.7T

    I’m amazed that nobody mentioned their extremely cautious recent redesigns as a core cause of their current issues. The Sonata went from one of the more interesting and daring designs in its segment to THE most anonymous in one fell swoop. Same thing with most of the rest of the lineup.

    Their overall build quality is fine, the suspension tuning is the best it’s been (could still be better), but the designs have gotten boring. Shame, really, but relatively easy to fix. Hopefully they’ll let Mr Donckerwhathisname display his talents in the same way that Mr. Schreyer did at Kia…

  • avatar
    RHD

    While it’s laudable for Hyundai/Kia to bring in foreign executives to correct their company’s shortcomings, it is also an admission that after more than 30 years in car manufacturing and sales, they still haven’t figured out how to make properly competitive and competent product.
    What is the difference between GM and HK? GM designs great cars, then cheapens them into junk. HK designs halfway decent cars with terrible handling, then attempts to improve them somewhat.
    Both companies ask “funny money” prices, then will give you thousands of dollars off if you will just please take the damn thing with you when you leave.

    • 0 avatar
      OldManPants

      “halfway decent cars with terrible handling”

      And they also have terrible feng shui which is almost as important to most shoppers as handling.

    • 0 avatar
      ZCD2.7T

      I’m sort of amazed at the antipathy you seem to feel towards H/K…

      That said, they’re learning, just like every other successful mfr. has had to do. Their success, even if it’s not as remarkable as it once was, proves they’ve learned a lot in a relatively short period of time.

    • 0 avatar
      DeadWeight

      The abbreviation HK just triggered me, and it has nothing to do with Hyundai or Kia.

      Heckler & Koch still produces excellent quality firearms, as far as I know, from their civilian division, and particularly, law enforcement & military division.

      But Ron Cohen ruined Sig-Sauer completely – A$$HOLE – post 2005!

  • avatar
    don1967

    Anecdotal stories and personal bias do not explain weak sales. If they did, Hyundai sales would be skyrocketing right now based on my positive experience with three of their products.

    More likely it’s a simple case of the “perfect storm” (ie: fresh product + leading prices + financial crisis) being over. Hyundai had its fifteen minutes of fame but is now playing on a more level field.

  • avatar
    macmcmacmac

    Maybe they should have stuck with the restrained, Audi-like styling of the NF Sonatas instead of going all zoom-zoom-zoom with the 2011 restyle.

    Also V6 >> Turbo 4.

    • 0 avatar
      bd2

      Actually, Hyundai went too far the other way and the current Sonata is styled too conservatively (which is why for its MCE, the current Sonata will be getting fairly extensive changes to its sheetmetal).

      Otoh, the current Tucson is a major improvement over its predecessor.

      Biggest problem is product/supply mix.

      The other automaker have crossovers, SUVs and trucks make up over 50% of their sales.

      Even with the increase in Tucson and Santa Fe sales due to greater supply, Hyundai lags way behind with crossovers only making up around 32% of its sales.

      Only other automaker that is still so reliant on cars is VW (and they are about to change that with the launch of a slew of new crossovers).

  • avatar
    Dilrod

    I just bought a CPO Sonata Limited. Nice thing about Hyundai’s depreciation: I got a lot of value for the price I paid plus a good interest rate.

    I also test drove an Elantra to be sure I was getting my money’s worth. It was nice but reminded me of my ’89 Ford Festiva after driving that Limited.

    I like Hyundai, we used to have an ’03 XG350L and my wife has an ’11 Sonata SE. The XG had 235000 mi. on it when we bought it and we put on another 10k. I did a lot of work on it and I was impressed with the quality. After a brief affair with a Ford F150 that cleaned me out at the gas pump I ran back to the loving arms of Hyundai and got my own Sonata.

    Comments above are spot on about the Genesis rollout. My local dealership is pretty good, but the Genesis on the showroom floor sits off to the side in front of the service counter. DIY greasemonkeys like me stick our heads in it on the way to the service desk to buy parts, scaring away people who can afford them (or who at least think they can afford them).

    Lastly, my dealer has free popcorn. If that can’t increase sales, nothing will.

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