Are We Witnessing the Beginning of Hyundai's Recovery?
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
Former British PM Winston Churchill used this somewhat confusing quote to describe the status of the war following the defeat of Axis forces in North Africa, and it popped into my head while scanning Hyundai’s U.S. sales data for the month of August.
The sales slump experienced by a once-skyrocketing Hyundai is well covered. Last year was a grim one for the brand, as a combination of falling passenger car sales and not enough crossovers saw the automaker’s U.S. fortunes tumble. Since then, Hyundai’s been on a new or refreshed model tear, and it’s not over yet. Has the automaker’s recovery seen the end of the beginning?
To sum up last year’s sales, 11 out of 12 months saw the brand suffer year-over-year monthly losses — often significant ones. This year’s tally of 435,852 vehicles sold in the U.S. (through the end of August) remains lower than that of the same period last year, but not by a lot. It’s 1.25 percent below 2017’s figure. Still, there’s promising signs that the automaker has reached the end of its slump, and it’s not just because of the fresh sheet metal on the way.
August Hyundai sales rose 8 percent in August, year over year. Equally as important, this increase came as fleet deliveries shrunk by 30 percent, boosting the profitability of that group of vehicles. May and June also saw the automaker post a year-over-year sales gain.
Currently, there’s a new Santa Fe Sport arriving on dealer lots, though it now carries the name Santa Fe. The old Santa Fe (now Santa Fe XL) three-row crossover soldiers on just for the coming model year before its replacement by a larger vehicle with a wholly new name. As Hyundai doesn’t split the sales reporting on these two, there’s no way to parse the popularity of the brawnier newcomer.
Elsewhere in the lineup, the compact Tucson seems to know no ceiling, as its sales rose 19 percent compared to last August. Year to date, it’s up 27.7 percent. The subcompact Kona, the first new addition to the lineup in some time, began arriving in late February and last month surpassed sales of the Toyota C-HR and Ford EcoSport. That infusion helps offset declines by passenger cars like the Sonata midsize sedan, which stands to gain a revamped successor sometime in 2019.
Interestingly, compact Elantra sales are up ever so slightly on a monthly and year-to-date basis, and there’s a refreshed 2019 model ready to go. Whether or not the sedan’s new front and rear design, as well as tweaked content, bring more customers into the model remains to be seen. It’s hard to be optimistic in this segment. The same goes for the second-generation Veloster — a revamped model we didn’t expect to see — though its volume hardly adds much to the overall tally. Every little bit helps, we suppose.
Having a fresh-looking lineup is nice, but it’s crossovers and SUVs that make or break automakers these days. With this in mind, it would be surprising to not see Hyundai beat last year’s sales tally by the end of 2018, if only by a small margin. Next year’s introductions, which include both the Santa Fe XL replacement and an A-segment crossover, should set the brand’s recovery in stone. If it can’t, what can?
Arach on Sep 11, 2018
I bought my first Hyundai 2 years ago. Got 43% off MSRP with 7k miles and 6 months on it. I thought "Man Hyundais are SWEEETLY undervalued" So my wife needs a new car now, and I'm like "off to Hyundai we go!" But WTH? They aren't cheap anymore. They are holding their values better than almost anything else we look at . You can barely find a 6 year old santa fe with 100k miles under $20k... but you can readily find the more expensive durangos, explorers, etc.. Even my sedan, I put 40k miles on it, and trade in value is supposedly only $3k less than I paid 26 months ago? How does the lowly hyundai start holding such strong values in the used market? URGH! Frustrating. They are no longer on our radar because we can no longer justify the value proposition on a Hyundai, while just 2 years ago its about all we could justify. Thats a huge shift.
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