By on June 8, 2017

2017 Hyundai Tucson - Image: HyundaiThis is not what you’d call a long history of sales difficulties for Hyundai, the seventh-best-selling auto brand in America. The 2016 calendar year was Hyundai Motor America’s best ever, the culmination of eight consecutive years of growth.

Yet while Hyundai rapidly — and not unpredictably — grew its U.S. sales coming out of the recession, nearly doubling its sales between 2008 and 2016, the rate of growth was notably slower in 2016 than in prior years. Blame capacity constraints, blame a car-centric lineup in an SUV-leaning world, blame conservative redesigns, blame whatever you want.

Regardless, Hyundai is feeling the pinch now. Year-over-year, sales have declined in each of the last six months. Hyundai’s U.S. CEO, Dave Zuchowski, was ousted just before Christmas 2016. In May 2017, for the first time ever, Kia outsold Hyundai in the United States. And on June 6, 2017, Hyundai Motor America’s vice president for sales, Derrick Hatami, exited the building as well.

All is not well. So then, more SUVs?

2018 Santa Fe and Santa Fe Sport - Image: HyundaiPerhaps, but is Hyundai really lacking in the SUV/crossover sector?

Hyundai’s utility vehicle lineup is just as big as Honda’s. The Tucson, Santa Fe Sport, and Santa Fe stack up against the HR-V, CR-V, and Pilot, and where are the accusations that Honda’s utility vehicle lineup is found wanting?

Indeed, heading into May, Hyundai wasn’t short on SUV/crossover supply, either. According to Automotive News, Hyundai had a 72-day supply of utility vehicles as of May 1; a 46-day supply of passenger cars. Meanwhile, Hyundai is increasing the value quotient of its bigger utility vehicles. Hyundai will also eventually add the Kona subcompact crossover at the bottom of the lineup to take on the Honda HR-V.Hyundai Kona teaser - Image: HyundaiBut the Kona’s timing speaks to Hyundai’s slow reaction to the SUV/crossover craze. Competitors already exist at Buick, Chevrolet, Fiat, Honda, Jeep, Mazda, Mini, Mitsubishi, Nissan, and Subaru. The Santa Fe is more than four years old; the Santa Fe Sport is in its fifth model year. Freshness helps: the not-quite two-year-old, third-generation Hyundai Tucson just reported its best month of U.S. sales ever.

In fact, year-to-date, Hyundai’s three-pronged utility vehicle division is up 20 percent. But while the U.S. market leans on light trucks for more than 60 percent of its sales, Hyundai brand relies on a car division (that’s lost 16 percent of its sales so far this year) for nearly 70 percent of its U.S. volume.

Perhaps Hyundai’s early 2017 downturn is a blip on the radar. Maybe Hyundai can turn the ship around in the second half, during what’s expected to be a market-wide decline.

But if not, what would you do to fix Hyundai Motor America’s current difficulties?

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

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27 Comments on “QOTD: Are Hyundai’s Troubles Nothing A Few SUVs Can’t Fix?...”

  • avatar

    I have a feeling H/K troubles stem more from the total disregard of their customers and standing behind their product then anything else. Tens of thousands of engines blowing up and H/K giving the customer the run around about covering this under warranty even though customers had their car serviced at the dealer. What is a 10year/100K warranty if your not gonna honer it.

  • avatar

    Quality of service really took a nosedive. My Sonata fell apart. I have two friends that have owned their last Hyundai’s after some pretty bad quality problems. Long term reliabity in my experience is poor. I have a friend thinking of a fiat. When I asked him if he was sure about that , his reply was ” if I can deal with the issues from my elantra you really think a fiat could be worse? “

  • avatar

    H/K is just more susceptible to the tide of the market. Everything is contracting as incentives stop working and credit starts to tighten. Their SUVs are attractive enough and competitive for their segments… I don’t think there’s much more they can do in that regard.

    It’s a shame they are letting the people who helped revive them from the recession go. They are in a panic.

  • avatar
    Big Al from Oz

    I think Hyundai has reached an intermediate phase of expansion, a cross road.

    Does Hyundai present itself as a value for your buck supplier or does it move on and move up a wrung against the manufacturers of better quality vehicles.

    If it moves up and takes on established quality manufactuers like, Toyota, Mazda, Subaru and Honda can it achieve?

    Will Kia remain a “bargain bucket” and compete with GM, FCA, Ford, Nissan, Mitsubishi, etc.

    I think we can break down the every day appliance car makers into these two groups.

    Lower quality bargain and middle quality products.

    Where will Hyundai and Kia be positioned?

  • avatar

    I think Hyundai and Kia are both experiencing some growing pains as they strive to be major players in the market a la Honda and Toyota.

    I know that when I take my car in for service at the Mazda/Kia/Volvo dealer (Weird combination, I know), I see a LOT of newer Kias in for engine-out repairs. The big engine recall they have can’t be good for reliability ratings or word of mouth.

  • avatar

    It’s hard to know what to believe about Hyundai.

    On one hand, they have this doosy of an engine recall, and the internet says engines have been failing for years and Hyundai doesn’t honor their warranty……on the other hand….Hyundai does well in JD Power, Consumer Reports, and very well in customer loyalty indices. I’m hoping the latter is closer to the truth, and I just bought an Elantra Sport.

    Not sure what Hyundai’s deal is, they seem to have a competitive line up, and the engine recall is too new to have impacted sales earlier this year.

    • 0 avatar

      From anecdotal experience, Hyundais are disposable cars. They’re pretty trouble-free for your typical first owner, but by year 8, you’d better have a replacement plan (if you’re not a B&B 200k min Jim Kramer disciple, this isn’t the worst thing ever).

  • avatar
    Kyree S. Williams

    As far as Hyundai and Kia, their respective lineups have never been better. But I’m really turned off by how impermanent and disposable their cars seem to be. Now that my mother’s 2012 Sonata Limited has hit 90K miles or so, I’m starting to see how much better off we’d have been if we’d spent another 15% or so on a Honda. The fit and finish, in particular, is not holding up, and the powertrain and suspension both feel extremely rough.

    • 0 avatar

      Problems at 90k miles will detract no one. My mom’s 2010 G6 had the paint on the radio/door lock buttons peeling off at 30k. 5k miles later the control arms were completely shot. Blown fuses, steering failure, and 5 recalls soon followed. This is saying nothing of the squeaks and rattles. That’s the kind of reputation that hurts cars, like pretty much any recent VW or current Jeep. Meanwhile my dad’s 2010 Kia Soul is at 140k miles and still feels basically new. Go figure.

  • avatar

    Hyundai would have to start by making an SUV first, all I see are CUVs.

    “But if not, what would you do to fix Hyundai Motor America’s current difficulties?”

    Innovate and create something new.

  • avatar

    Hyundai will not get repeat customers from those who bought the 1.6T Tucson models. They’ve failed to address issues with the 7 speed DCT; with many that ended up having their vehicles purchased back or continue to spend days back at the dealer. I’d highly suggest they get the 8 speed slushbox behind that engine ASAP. Hyundai does know that there’s a problem and they’re now offering an “SE Plus” model that adds features found on the 1.6T Limited and Sport (minus the 19″ wheels) without the 1.6T and DCT for customers that want to skip that mess.

    When the stars align and it’s not having a bad day the 7 speed works perfectly, but it’s few and far between; the more that I add miles to it, the more bad days it has. The 1.6T on the other hand is a gem and absolutely murders the Sportage on fuel economy. I’m averaging around 32 highway and don’t drive it lightly.

    • 0 avatar

      I don’t trust any automatics, they’re just too complicated.

      I just got out of a 2014.5 Camry V6, the most reliable car in the WORLD!!!…..and it had a shuddering torque converter at 40K miles. When it worked perfectly, it still sucked, it was super slow to downshift.

      I have had 11 manual transmission cars from different manufacturers and never had an issue.

    • 0 avatar

      IDK. My 2012 Sonata Hybrid has 151k on it now. The dealer told me at 110k that I needed a new ($8,000) transmission, but that was nearly a year ago and it’s still going. Everything else on the car works perfectly, and the interior is holding up well under heavy full time Uber usage.

    • 0 avatar

      As the owner of a 2017 Tucson 1.6T Sport, I could not agree with you more. The DCT is a significant black mark against this vehicle, and I believe it’s the primary reason why it’s not more popular with the buying public. It’s a shame, too, because the Tucson is otherwise good looking, quick, surprisingly fun to toss around, and gets very good fuel economy despite its average-for-the-class EPA ratings. Had the SE Plus been available (it came out about 3 months after I bought mine) I would have jumped on it, despite the normally aspirated motor being noticeably slower than the turbo.

      My previous vehicle was a 2008 Santa Fe that I traded in with a tick less than 100k on it. It started chewing through suspension and steering components starting from 70k, which I attribute to poor engineering on those parts that was common on Hyundai vehicles from that time period. Santa Fes and Sonatas suffered from noticeable secondary body motions when going over cracked Midwestern pavement, which I think caused the components to wear more quickly than they otherwise would. Thankfully, most of the repairs, including a brand new steering rack, were covered by the extended warranty we bought with the vehicle. It cost $1,400 at the time for 10 years/100k miles with $0 deductible, and up until the moment of trade-in, Zurich paid out more than $3,000.

  • avatar

    Kia is beating Hyundai at the value game. Model for model, you just get more from Kia for the same money. Kia has been offering luxury options on many models that Hyundai took years to offer or still doesn’t offer (navigation in a Rio, cooled seats in a Forte, etc). The only feature Hyundai had that Kia really didn’t was the panoramic roof on so many models, but Hyundai has cut that feature as well.

    I would love to see a model by model breakdown comparison between the Hyundai/Kia twin models, to see where Kia is winning. My guess is that it boils down to the Soul. Kia has the Rio which is just an Accent in sedan and hatch form, but their volume subcompact is really the Soul, which seems in huge numbers.

    Lastly, a good part of Hyundai’s lineup is just at the end of their life cycles. The Accent, Azera, and Veloster came out in 2012, The Santa Fe Sport and Santa Fe in 2013. Time for new blood.

    • 0 avatar

      Hyundai beats Kia on pretty much every competitive vehicle – the big difference is indeed the soul, as Hyundai has no competitive offering. (Kia also has their minivan – while Hyundai has nothing there too, but that is less important.)

  • avatar

    H/K have topped out and tapped out the segment that wants well equipped/priced appliance cars and the assumed security of a long warranty. Further growth in a mature market such as the US will mean taking share from someone else, and virtually everyone else is now churning out pretty excellent vehicles. Since they are not a low cost producer anymore, they can’t really focus on low prices, but since they don’t have any brand cache they will struggle to go upmarket. They might go into pickups, but witness the struggles that Toyota, Nissan, and Honda have had in taking share away from Ford, Chevy, and Ram (Dodge). They can try eco-cars, but those aren’t profitable and anyone that wants one would prefer a Prius or Tesla. The biggest risk the H/K is that their buyers will migrate to Chinese cars when they become more available, because those will not doubt be cheaper.

  • avatar

    I think this is mostly an issue of being stale in the hottest part of the market. Having older CUVs and no true SUV is just a handicap to the brand. Even the new Tucson isn’t enough to turn things around. Look out how hard it’s been for Mazda even with the CX5 generally being considered a standout.
    I hate the CUV craze but it’s where the market is and Hyundai is late to commit. They need to focus some serious resources to that area and fast to avoid losing market share.
    Adding hotness to some models is nice for people on this site, my Elenta Sport buying self included, but we don’t drive the market. Time to get your CUV game together. The masses demand nothing less.

  • avatar

    I’ll beat this drum again: Hyundai dealers suck and their pricing strategy (i.e., price the cars too high and then discount them to hell) is nonsense. None of this helps them sell cars on anything but price. Is that really where they want to be in this market?

    The product is competitive but the marketing isn’t.

  • avatar

    I’ll be more interested in buying Hyundai when I see significant numbers of used ones still serving as reliable transportation with more than 200k miles on the original engine and transmission with no rebuilds or catastrophic failures.

    Other OEMs seem to be able to hit this mark pretty consistently, not sure why the Korean brands struggle with it. I’m sure buyer demographics play a role.

    • 0 avatar

      My girlfriend gave her kid her old 2009 Accent, which now has well over 100,000 miles, and it’s been pretty bulletproof; her 2013 Accent is also well over 50,000 miles and it’s been trouble free as well. The word on Hyundai reliability these days is generally quite good.

      I might have gotten more serious about an Elantra last year if their dealerships were more professional, and they had a different pricing structure other than “price-em-high-and-then-discount-em-to-hell,” complete with any number of rebates that most buyers won’t qualify for.

      • 0 avatar

        I don’t doubt that they’re better than they used to be, and solid to 100k miles or more.

        However, I can get on CL and easily find many many Honda, Toyota, Ford, and GM products at 200k+ still on the original powertrain. I’ve been looking for a long time, and can’t find any equivalent Hyundais.

        I keep cars for 200k miles, so once I start seeing Hyundais routinely hitting this mark I’ll consider them to a manufacturer worth looking into. Same goes for Kia.

  • avatar

    Hyundai thinks that they are “premium” mainstream when in the US they’re still the value mainstream guys.

    Hyundai had a chance to be the new Honda/Toyota—-but it’s looking like that they blew it by allowing to many non-honored warranty claims and skimping on 100,000+ mile durability.

  • avatar

    This is like the 5th article that’s mentioned problems at Hyundai which basically aren’t problems. I don’t understand why this is a topic. They’re doing fine. Their product mix is off. The only reason they didn’t rush a subcompact CUV to the market is because, unlike GM, they didn’t have one waiting in the wings. Ford does, and they still haven’t brought it here!

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