Hyundai plots SUV push to win U.S. buyers

John Lippert and Sohee Kim
Bloomberg News

Hyundai Motor Co. is finally going to give America what it wants: more sport utility vehicles.

The South Korean automaker mired in a U.S. sales slump said it will bring eight new or redesigned crossovers or SUVs to the market by 2020. The plans are a belated effort to recapture buyers who’ve been shunning sedans and compact cars – segments where Hyundai’s lineup is strongest.

Passenger cars haven’t made up the majority of U.S. auto sales since 2012, and their share of the market has slipped to less than 38 percent this year, according to researcher Autodata Corp. This shift has hit Hyundai hard. The company doesn’t have a pickup truck and its only SUVs are the Tucson, Santa Fe and smaller Santa Fe Sport. Cars still comprise nearly two thirds of Hyundai’s deliveries in the country.

“Hyundai’s American management has been screaming for more CUVs and more trucks for years,” said Alan Baum, an independent auto analyst in West Bloomfield, Michigan, referring to crossover utility vehicles.“They tried to take what worked in their home market in Korea and apply it to North America. It hasn’t been very effective.”

The dependence on cars has contributed to Hyundai’s 13 percent decline in total U.S. sales this year through October, a steep drop within an industry that’s down just 1.7 percent. The company lost its local sales chief to Volkswagen AG earlier this year, has had three different chief executive officers run its U.S. unit since 2013 and is poised to lose market share for the fifth time in six years.

“There’s been no consistent American management at that company, no one to really guide product strategy and marketing, because the home office in Korea jettisons them whenever they miss the company’s unrealistic sales targets,” said Maryann Keller, an independent auto analyst in Stamford, Connecticut.

New SUV models coming to the U.S. will include a compact model called Kona that Hyundai began selling in Korea in June, plus updated Santa Fe and Tucson models.

Hyundai said its SUVs will include diesel, electric and hydrogen fuel cell-powered models. A small pickup based on the Santa Cruz concept shown at the Detroit auto show almost three years ago also is going into production, although the company hasn’t said when.