HYUNDAI-KIA: Far away from first gain of '17


Big increases in incentive spending last month couldn’t save car-dependent Hyundai-Kia from its largest sales decline of the year, as consumers continue to shift to crossovers and SUVs.
The Korean duo, which has not reported a combined increase in monthly sales since November 2016, sold 110,650 Kia and Hyundai models in June, a 15 percent decline from June 2016. For the year, the company is down 8.6 percent.
Hyundai, including its luxury Genesis brand, saw June sales plummet 19 percent — the brand’s largest monthly decline of the year — while Kia dropped 10 percent.
Hyundai’s decline — its sharpest since June 2009 — was a result of a reduction in fleet sales, as its retail sales increased more than 1 percent, according to the company.
“June was the second month in a row we’ve cut back significantly on fleet sales and seen a rise in retail sales in an industry that is down on the year,” said Sam Brnovich, executive director of national sales for Hyundai Motor America.
At Kia, the Rio, Sorento, Sedona and Soul all plunged 20 percent or more. Highlights for the brand included sales of the recently redesigned Cadenza luxury sedanmore than doubling, and the midsize Optima sedan and compact Forte models each up by almost 25 percent.
ALG estimates incentive spending last month for both Hyundai and Kia reflected among the highest increases in the industry yet still below the industry average. Hyundai was estimated to lift incentive spending 42 percent to an average of $3,259 per vehicle, while Kia was estimated to increase 25 percent to $3,384. The average industry increase was 9.7 percent, to $3,550, according to ALG.
The increased incentive spending follows some turmoil within the company’s sales operations. As detailed this week by Automotive News, despite declining car sales industrywide, parent company Hyundai Motor Corp. has declined to cut car production, highlighting a persistent tension point between the U.S. sales team and headquarters in South Korea, which considers the changing U.S. sales mix a reality that Hyundai Motor America must adapt to on its own.
Hyundai Motor America CEO Dave Zuchowski was fired in December for failing to hit aggressive growth targets, and U.S. sales chief Derrick Hatami left the company for Volkswagen last month after weak sales reports in 2017. Hyundai is still searching for successors to both, while Hyundai Motor America’s general counsel, Jerry Flannery, is interim CEO.
The Hyundai division, as forecast by ALG, is the only major company besides Subaru to not increase its average transaction prices in June. The Korean automaker was down 3.8 percent compared with a year earlier to $22,600, while the industry was up 1.5 percent to $32,900. Kia was up 0.4 percent to $22,700.
Fuente: Automotive News

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