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It was the butt of bad jokes, a brand only the most desperate motorists could take seriously, and little more than a decade ago, with sales in a nosedive, Hyundai seemed likely to vanish into the dustbin of automotive history. Yet anyone wagering against the Korean carmaker would’ve lost the bet, it turns out.
Since 1998, Hyundai Motor America (HMA) has seen its sales soar more than four-fold, and after reaching a record 455,012 last year, the company is confidently forecasting the numbers will top the half-million mark this year, despite the overall slowdown of the U.S. automotive market.
Of course, Hyundai made bold predictions before, and its initial success was followed by a near-fatal collapse. This time, though, company officials insist they’ve learned from the past — and from their competition. They’re emphasizing quality and reliability, putting a premium on safety, and fast filling in the gaps in the brand’s product portfolio. But perhaps the boldest — and riskiest — move is the opening of a new Alabama assembly plant, a facility expected to supply the bulk of the vehicles Hyundai will market in North America.
To get a sense of what’s in store, we spent an evening with John Krafcik, HMA’s vice president of product development and strategic planning. Krafcik joined Hyundai two years ago, after spending much of his career with Ford Motor Co. and, before that, NUMMI, the California-based joint venture between
Krafcik recalled it wasn’t an easy decision to move, but he ultimately decided to go with a “growth-optimistic company, rather than one that was trying to manage its decline.”
Part of the appeal, he added, was “the freshest lineup in the industry,” Hyundai’s 24/7 plan was aimed at rolling out seven all-new or completely-updated model lines in just 24 months. Indeed, today, Krafcik pointed out, “The oldest car in our lineup is the
The big push is wrapping up, with the recent update of the Sonata, the introductions of a
Another product in the works is the “Rear-Wheel-Drive Premium Car.” While there’s some debate whether to bring it to the
Like many of competitors, Hyundai is looking to rear-drive for several models, perhaps tapping the RWD expertise of its sibling brand, Kia. That approach could help Hyundai finally achieve the promise of its sporty Tiburon. The prototype under development, boasted Krafcik, “is oozing performance. Imagine an Infiniti G; this is where it will go.”
Meanwhile, a Tiburon convertible is under serious consideration.
While new product is clearly critical to Hyundai’s present and future, there are other issues it must address. Hyundai is hoping to steal a march on the competition by offering anti-lock brakes, traction, and stability control in the majority of its new models.
A ten-year warranty was critical to Hyundai’s turnaround, acknowledging longstanding quality problems and customer dissatisfaction. It generated plenty of press, but also risked running up billions of dollars in additional repair work. As it turns out, asserts Krafcik, the “
“Our warranty costs are falling off the chart,” he said, currently running “30 to 40 percent” what they were when the program began and half as much as in 2002.
That’s more impressive given the flood of new products, which have been launching without many of the expected launch problems. There were some initial start-up issues in
Other recent industry studies have been favorable, including AutoPacific’s Vehicle Satisfaction Award, where Hyundai was barely nudged out as Best Mainstream Brand by Honda. Hyundai still took two segment awards with its
The driving goal is to exceed
Various industry studies show that less than one in four American new car buyers would consider a Hyundai. That’s echoed by Hyundai’s own data, though Krafcik pointed to a steady rise in the number of current and potential
Meanwhile, transaction prices — the dollars actually paid for a vehicle — have steadily gone up. When the ten-year warranty began, the typical Hyundai went for about 82 percent of industry average. That’s now up to 92 percent.
Though things are starting to look good for Hyundai Motor America, there are still plenty of challenges. The competition is certainly paying more attention to the Korean upstart, with Japanese makers rolling out lower-cost offerings, such as the new Toyota Yaris, Nissan Versa, and Honda Fit.
Initial start-up snags at the
But for the moment, there’s plenty to be optimistic about, insisted Krafcik, and it appears a hard point to argue against.