Post by bgluckman on Sept 17, 2004 17:07:46 GMT -5
From AutoNews
Hyundai expects 7 new vehicles in next 2 years
Reuters / September 17, 2004
DETROIT -- Hyundai Motor Co. Ltd. sees the addition of seven new vehicles in the next two years raising its U.S. sales more than 25 percent, past the half-million mark annually, the head of the Korean automaker's U.S. sales arm said on Thursday.
Hyundai, already the fourth-largest foreign automaker in the United States, also hopes to double the percentage of vehicles its credit arm finances as it grows, said Bob Cosmai, CEO of Hyundai Motor America.
"(For) 2006, we're poised for a pretty big jump. We'll be north of 500,000 (vehicles sold)," he said Thursday.
Regarded only a few years ago as little more than an alternative to used cars, Hyundai has seen its U.S. sales grow from 90,000 in 1998 to 400,000 in 2003. The company has become a legitimate competitor to top mainstream automakers such as Toyota, Honda and the Big 3 as the quality of its vehicles has improved.
Hyundai's "profitability has been very impressive," Standard and Poor's lead auto analyst Scott Sprinzen said Thursday.
But the automaker was growing too fast, he said.
"The main risk that they face is just overreaching with their growth strategy because they are expanding so much in different markets and productwise," Sprinzen said.
For this year through August, Hyundai's U.S. sales are up about 2.5 percent. The company is striving for a total of 430,000 units by the end of the year, which Cosmai said will be a tough target to reach given the "disappointing" growth of the U.S. economy.
Among Hyundai's seven new vehicles are the next-generation Sonata mid-sized car, which goes on sale early next year. The car will be the first product from its first North American assembly plant in Montgomery, Alabama.
About 15 percent of the vehicles Hyundai sells in the United States are financed through the company's credit arm. Cosmai said he hopes to double that to about 30 percent in the next two years. Financing vehicles has proved to be critical in boosting earnings, particularly for U.S. automakers.
HIGHER INCENTIVES
While sales have grown, the unexpectedly high 20 percent climb in incentive costs this year has hurt results, Cosmai said.
"That's a challenge," he said. "I don't care who you are, everybody is spending on incentives."
Sales incentives have soared in recent years and consumers have grown used to getting a deal, industry officials have said.
Hyundai will try to contain its incentive spending by offering consumers more options at a lower price, Cosmai said.
As Hyundai's sales increase, the automaker expects its number of U.S. dealers to expand from 665 at the end of this year to about 700 by the end of 2005.
Many of those dealers sell other brands next to Hyundai at their dealerships. Cosmai said he plans to tell dealers at a meeting in Texas in early October that they should drop those other brands and sell only Hyundai from a single dealership.
"It's time to make the decision for Hyundai," Cosmai said.
Reuters / September 17, 2004
DETROIT -- Hyundai Motor Co. Ltd. sees the addition of seven new vehicles in the next two years raising its U.S. sales more than 25 percent, past the half-million mark annually, the head of the Korean automaker's U.S. sales arm said on Thursday.
Hyundai, already the fourth-largest foreign automaker in the United States, also hopes to double the percentage of vehicles its credit arm finances as it grows, said Bob Cosmai, CEO of Hyundai Motor America.
"(For) 2006, we're poised for a pretty big jump. We'll be north of 500,000 (vehicles sold)," he said Thursday.
Regarded only a few years ago as little more than an alternative to used cars, Hyundai has seen its U.S. sales grow from 90,000 in 1998 to 400,000 in 2003. The company has become a legitimate competitor to top mainstream automakers such as Toyota, Honda and the Big 3 as the quality of its vehicles has improved.
Hyundai's "profitability has been very impressive," Standard and Poor's lead auto analyst Scott Sprinzen said Thursday.
But the automaker was growing too fast, he said.
"The main risk that they face is just overreaching with their growth strategy because they are expanding so much in different markets and productwise," Sprinzen said.
For this year through August, Hyundai's U.S. sales are up about 2.5 percent. The company is striving for a total of 430,000 units by the end of the year, which Cosmai said will be a tough target to reach given the "disappointing" growth of the U.S. economy.
Among Hyundai's seven new vehicles are the next-generation Sonata mid-sized car, which goes on sale early next year. The car will be the first product from its first North American assembly plant in Montgomery, Alabama.
About 15 percent of the vehicles Hyundai sells in the United States are financed through the company's credit arm. Cosmai said he hopes to double that to about 30 percent in the next two years. Financing vehicles has proved to be critical in boosting earnings, particularly for U.S. automakers.
HIGHER INCENTIVES
While sales have grown, the unexpectedly high 20 percent climb in incentive costs this year has hurt results, Cosmai said.
"That's a challenge," he said. "I don't care who you are, everybody is spending on incentives."
Sales incentives have soared in recent years and consumers have grown used to getting a deal, industry officials have said.
Hyundai will try to contain its incentive spending by offering consumers more options at a lower price, Cosmai said.
As Hyundai's sales increase, the automaker expects its number of U.S. dealers to expand from 665 at the end of this year to about 700 by the end of 2005.
Many of those dealers sell other brands next to Hyundai at their dealerships. Cosmai said he plans to tell dealers at a meeting in Texas in early October that they should drop those other brands and sell only Hyundai from a single dealership.
"It's time to make the decision for Hyundai," Cosmai said.