The recent recession caused many automakers to look at their production numbers and try to find way to scale back in an attempt at cost cutting. The same cannot be said for Hyundai, who has seen their sales jump by over 100.000 units since 2010.
While the bottom line looks great, that sort of growth doesn’t come without problems of its own, and those issues were recently addressed by Hyundai Motor America CEO John Krafcik during an interview with the Los Angeles Times.
While sales for Hyundai has increased dramatically, they still maintain one of the lowest inventory levels in the industry; a fact that seems to fly in the face of conventional wisdom.
Krafcik explained that there is a very definite balance between sales and inventory levels that the company hopes to maintain, and that doing so is a process that is always in motion. Production levels have been increased in plants across the US and Canada, but rather than getting carried away with their success, Hyundai continues to try and keep inventory levels low, whilst still meeting consumer demand.
Much of Hyundai’s recent success has been built on the back of the value of their cars, and the feeling among many is that the value message will be lost if they fail to meet demand for their vehicles, putting dealers in the position of arbitrarily inflating prices to take advantage of that demand.
Krafcik countered by stating that dealers are free to set whatever price they wish, regardless of demand and that dealers have actually done a great job of selling Hyundai’s as close to MSRP as possible.
He went on to say that customers have never been more pleased with the value of their cars, despite the fact that the $750 rebate offered by Hyundai is among the lowest in the industry.
Krafcik then went on to talk about the projects that Hyundai has lined up for the coming year, including the release of the Azera and Veloster Turbo models in 2012.
He shared his hopes that the Azera would soon become the flagship vehicle for the front-wheel drive category, feeling that the luxury features that come standard in the Azera would be a huge selling point.
The idea of combining luxury with the Hyundai brand may have seemed like a ridiculous concept just a few short years ago, but the company’s shift to a more design oriented brand that also emphasizes value has quickly changed the perceptions of many in the industry.
That may be most telling with the sales results of the Equus, with many people believing that Hyundai would be unable to jump into the luxury car market with any level of success, especially with a vehicle priced at less than $58,000.
Krafcik was quick to point out that the Equus luxury sedan holds a 5 percent share in the luxury sedan market, which is a number that is consistent with their position in the market as a whole.
He finished up by saying that 2012 looks like it will be another exciting year for Hyundai, and if that’s the case, then perhaps we will be talking about more new sales records this time next year. [Source: L.A. Times]