Hyundai’s latest offerings; the Santa Fe crossover and the updated
Sonata hybrid mid-size sedan are the Korean automaker’s response to the
revival of its Japanese rivals.
Throughout the economic crisis of 2009 then in the wake of the 2011 earthquake in Japan, Hyundai was the innovative
upstart. When unemployment in the U.S. was skyrocketing in 2009, the
company offered the “Hyundai assurance” program that let people return
cars if they lost their jobs.
Before that it introduced 10-year warranties.
Now, however, it is confronting headwinds.
Hyundai and its cousin brand Kia tend to do well during hard times, because price is their most importance marketing tool. But as American consumers are more willing to pay what the Detroit Three, Toyota, Honda and Nissan are charging, the value story is less compelling, said Edmunds.com analyst Michelle Krebs.
‘Hyundai’s big advantage is they could pack a lot of content in a vehicle
and offer it for a low price,” Krebs said. “But Korean currency is not
in their favor and the yen is in Japan’s favor so we could see the
Japanese automakers adopt the Hyundai strategy of offering a lot of
content affordably.”
To some extent Hyundai’s recent success has complicated its marketing challenge.
For example, with the success of its Sonata midsize and Elantra compact, the resale value of its vehicles rose to the industry’s second highest behind Honda, according to ALG, a research firm that focuses on resale values.
That has contributed to a $539 increase in the average price buyers pay for a Hyundai, to $23,070, which is 2.4% higher than a year ago, said Brandon Ramirez, a product planner for Hyundai America.
Then buyers return to the market tend to look for the newest and freshest models. Hyundai is at a point in its lifecycle where it has older vehicles in some segments, said Krebs.
That’s why there’s a lot riding on the Santa Fe Sport, which is built in Georgia. It was launched last August and sales are running about 38% above the model it replaced.
The starting price is $25,555, including delivery charges, but the average transaction price for this third-generation vehicle is $29,200. Hyundai discontinued the larger Veracruz last year. It was not as competitive in attracting young families, Ramirez said.
The automaker is offering two longer wheelbase versions of the crossover, adding 8.5 inches and a third row of seats.
There is a 7-passenger Santa Fe GLS that starts at $29,205 as well as a 6-passenger Limited. Both are built in Korea. They get 18 miles per gallon in the city and 25 on the highway.
The Sonata hybrid, which went on sale last month, is also bringing in new buyers wanting the 36 mpg it gets in the city and 40 mpg on the highway.
John Juriga, director of powertrain engineering, said the car was designed to reflect highway driving conditions as opposed to being optimized for the EPA test that generates the highest possible numbers on the label.
Hyundai is still compensating consumers for vehicles with inflated mileage claims after the automaker erred in its testing of a number of vehicles.
Throughout the economic crisis of 2009 then in the wake of the 2011 earthquake in Japan, Hyundai was the innovative
upstart. When unemployment in the U.S. was skyrocketing in 2009, the
company offered the “Hyundai assurance” program that let people return
cars if they lost their jobs.Before that it introduced 10-year warranties.
Now, however, it is confronting headwinds.
Hyundai and its cousin brand Kia tend to do well during hard times, because price is their most importance marketing tool. But as American consumers are more willing to pay what the Detroit Three, Toyota, Honda and Nissan are charging, the value story is less compelling, said Edmunds.com analyst Michelle Krebs.
‘Hyundai’s big advantage is they could pack a lot of content in a vehicle
and offer it for a low price,” Krebs said. “But Korean currency is not
in their favor and the yen is in Japan’s favor so we could see the
Japanese automakers adopt the Hyundai strategy of offering a lot of
content affordably.”To some extent Hyundai’s recent success has complicated its marketing challenge.
For example, with the success of its Sonata midsize and Elantra compact, the resale value of its vehicles
rose to the industry’s second highest behind Honda, according to ALG, a research firm that focuses on resale values.That has contributed to a $539 increase in the average price buyers pay for a Hyundai, to $23,070, which is 2.4% higher than a year ago, said Brandon Ramirez, a product planner for Hyundai America.
Then buyers return to the market tend to look for the newest and freshest models. Hyundai is at a point in its lifecycle where it has older vehicles in some segments, said Krebs.
That’s why there’s a lot riding on the Santa Fe Sport, which is built in Georgia. It was launched last August and sales are running about 38% above the model it replaced.
The starting price is $25,555, including delivery charges, but the average transaction price for this third-generation vehicle is $29,200. Hyundai discontinued the larger Veracruz last year. It was not as competitive in attracting young families, Ramirez said.
The automaker is offering two longer wheelbase versions of the crossover, adding 8.5 inches and a third row of seats.
There is a 7-passenger Santa Fe GLS that starts at $29,205 as well as a 6-passenger Limited. Both are built in Korea. They get 18 miles per gallon in the city and 25 on the highway.
The Sonata hybrid, which went on sale last month, is also bringing in new buyers wanting the 36 mpg it gets in the city and 40 mpg on the highway.
John Juriga, director of powertrain engineering, said the car was designed to reflect highway driving conditions as opposed to being optimized for the EPA test that generates the highest possible numbers on the label.
Hyundai is still compensating consumers for vehicles with inflated mileage claims after the automaker erred in its testing of a number of vehicles.
