An interesting article in the N.Y. Times about Hyundai’s effect on Alabama since it opened a manufacturing plant there throws out this little tidbit almost as an aside: today marks 25 years of Hyundai selling cars in the United States.
Where’s all the hoopla one might expect with Hyundai selling cars for 25 years in the United States? Surely there should be at least a press release announcing the Korean automaker’s silver sales anniversary.
Since I published this article originally on Feb. 20, Hyundai has issued a press release marking the 25th anniversary. Among the tidbits in the press release:
- Since the company’s arrival, Americans have put 6,608,208 Hyundai vehicles in their driveways, with more than 4,350,000 still on the road today.
- U.S. production capacity has grown to over 400,000 units of Sonata, Elantra and Santa Fe models produced in modern assembly plants in Alabama and Georgia.
- Direct U.S. employment totals more than 4,000, with total employment including suppliers and dealers of over 45,000.
- Hyundai’s commitment to the U.S. market includes engineering, design, testing, production, sales, and marketing. In all, Hyundai’s investments in the U.S. total $1.7 billion.
It might make sense, though, for the brand that has been white hot for the last couple years to look forward and not backwards. Its first 20 years in this country, frankly, were less than auspicious. But in 2010, for the first time, Hyundai sold more than 500,000 vehicles in the United States.
That doesn’t mean Hyundai didn’t get off to a huge start when it sold its first car in the United States on Feb. 20, 1986. At the time Hyundai sold one car: the Hyundai Excel. Sales were amazingly strong the first year and Hyundai set a record with total sales of more than 168,000.
But then something happened – American consumers caught onto the fact that the cars were not only cheap in price but they were lacking in quality. Cheap as a negative connotation firmly attached itself to Hyundai until at least 2006, when its vehicles started to turn around and became a vehicle that people considered to buy instead of having to settle because they could afford nothing else.
That was demonstrated by its recognition by Kelley Blue Book in August of 2010. Its Brand Watch reported then that for the first time ever, Hyundai made the list of top five most-considered brands. In the second quarter of 2010 Hyundai brand consideration surged nearly six percentage points in the non-luxury coupe/sedan/hatchback segment. Hyundai now garners 29 percent of the total consideration among shoppers of this segment, beating out top competitors like Nissan.
Hyundai helped that turnaround by offering the now famous 10-year, 100,000 mile warranty around 2002 (My bad – it was actually 1999 I have since discovered). At first, people thought it was a desperate move on the company’s part but savvy consumers soon realized it wasn’t. No company can afford to offer a strong warranty like that if its products are going to fail. Bodacious claims like a 100,000-mile warranty can only be made with confidence. Otherwise, warranty costs would bankrupt a manufacturer.
No article on Hyundai would be complete without a quotation from John Krafcik, its American president and CEO: “As far as we’ve come since 1986, we still feel we’re in the early stages of connecting the Hyundai brand to the U.S. consumer. We’ve always challenged convention – from our powertrain strategies, to our consumer partnership programs, to our unique Genesis and Equus retail approach. It’s authentically Hyundai to question the status quo and pursue our own vision of how things should be in order to best serve our customers. This willingness to challenge convention will continue to guide us these next 25 years.”
J.D. Power and Associates announced in June 2010 that the Hyundai Accent topped the sub-compact segment in its 2010 Initial Quality Study (IQS). Owners of the economical and fun-to-drive 2010 Accent reported the fewest problems per 100 vehicles in its segment. Elantra also finished in the top three in the compact car segment.
The Elantra is Hyundai’s newest model on the road as the company celebrates its 25th anniversary. The fifth-generation model figures to do well in the compact market because it achieves 40-mpg on the highway in all trim levels.
Another smart move Hyundai made was upgrading its dealership experience. That investment paid off and now people no longer feel like they have to wash their hands after visiting a Hyundai dealership. Hyundai significantly improved its position in the rankings of the 2010 J.D. Power and Associates U.S. Sales Satisfaction Index StudySM (SSI), ranking No. 7 overall. Hyundai also had the greatest improvement of all mass market brands from 2009, moving from No. 16 to seven in 2010. The SSI study is a comprehensive analysis of the new-vehicle purchase experience. Overall customer satisfaction is measured across four factors: working out the deal, salesperson, delivery process, and dealership facility. This year’s study concluded that the manner in which customers are treated by the dealership is more important to overall new-vehicle buyer satisfaction than the actual transaction price.
In the near-term, Hyundai has some exciting products coming including the Veloster, a Tiburon-like compact in terms of looks if not necessarily performance; the 2012 Genesis Spec R, the most powerful Hyundai ever, with a new 5.0-liter direct injection V8 engine that produces 429 horsepower. The new Hyundai flagship, the Equus, which gets 385 horsepower from its Tau V8 engine.
Also coming from Hyundai are electric vehicles and more hybrids (featuring the world-first use of a lithium polymer battery). The Sonata Hybrid can be driven in zero emissions, fully electric drive mode at speeds up to 62 miles per hour or in blended gas-electric mode at any speed. When the car comes to a stop and the electrical load is low, the engine is shut down to completely eliminate idle fuel consumption and emissions.
One should not be surprised that Hyundai is finally doing well in the United States. After all, it is one of the top automotive manufacturing companies in the world. Hyundai Motor Company is the 188th leading company in the world, and third among automakers, according to an annual list of the top 2000 leading global companies published by Forbesmagazine. Hyundai has gained ground in the past two rankings, rising from 245 in 2008 and 196 in 2009. Ford Motor Company (58) and Honda Motor (86) are the only automakers ahead of Hyundai in the 2010 rankings.