An automaker can’t survive without crossovers.
All the major car companies that operate in the United States have a wide assortment of crossovers and SUVs available to consumers. Some, like FCA, are even dropping slow-selling sedans in favor of increased SUV, truck, and crossover production. Others, such as General Motors, offer heavy incentives on sedans but make up for the discounts with profitable SUVs.
Of the 44 automakers doing business in the U.S., only eight don’t offer a crossover, and most of those are supercar makers. (Thanks Autoblog, for doing that research.)
Hyundai has an assortment of crossover SUVs available, but wasn’t prepared for the SUV boom that is currently engulfing the world’s automotive markets.
The South Korean automaker has been hit by its exposure to weak emerging markets, and a product line-up that features more sedans than sport utility vehicles, just as SUVs have become more popular across many global market.
Hyundai is in the early stages of a major cost-cutting effort to prepare itself to develop a wider range of crossover options and bring its supply in line with the demand. Those cost reductions include cuts to executive salaries, less paid travel for employees, and even cutbacks on printing and light bulb use.
SUVs accounted for 28 percent of Hyundai’s sales in the U.S. through 2016, up from 23 percent a year earlier. That’s still less than half the industry average, so there’s room for growth. To accommodate that growth, Hyundai has taken a page from FCA’s book and replaced some Sonata production at its Alabama factory with the popular Santa Fe SUV.
Next year, Hyundai will look to plug a major gap in its lineup by making a sub-compact crossover for sale in South Korea, the United States, and Europe. The automaker does currently build a vehicle that would fit the bill, but it’s built in China, India, and Russia and would likely require a good amount of overhauling before being sold in other markets.
A CNN story quoted an auto analyst who said of Hyundai,
They have a lot of car models and no trucks. They do have some SUVs, but they aren’t dominant in their segment.
When you put big incentives on cars and don’t have the ability to offset it with big profits on trucks, it’s challenging.
The automaker has some serious work to do in the coming years if it wants to reverse the trend of falling sales and capitalize on the popularity of SUVs.
We hope it gets things figured out before gas prices rise again and buyers flock back to fuel-efficient sedans.
If you’re looking to buy a crossover or SUV, is Hyundai on your shopping list?