Hyundai Motor counts on new SUV model to revive sales

Bloomberg

Hyundai Motor Co. is counting
on its first global compact SUV model to revive flagging sales after missing out on the popularity
of sport utility vehicles in its major markets.
Vice Chairman Chung Eui-sun unveiled the Kona SUV, with a starting price of 18.95 million won ($16,800). The model will begin sales this month in South Korea, followed by North America and Europe, and is expected to compete with the Honda HR-V, Toyota C-HR and Nissan Juke. The automaker plans to introduce several SUV models in various
categories and powertrains, it said in a release.
“The global SUV market is an important market that has shown seven consecutive years of growth,” Chung said in the release. “Rather than hastily entering the market, Hyundai Motor released the Kona after thoroughly analyzing consumers and the market, as well as the technology.”
Hyundai Motor is playing catchup after being caught out by the shift in consumer preference away from sedans to larger and more expensive SUVs. The Kona, named after the district on Hawaii’s Big Island, is only the third global SUV model in the South Korean automaker’s lineup. The mismatch between demand and supply led to the carmaker last month registering its steepest decline in US retail sales since June 2009, while geopolitical tensions exacerbated the imbalance in China, its biggest market.
“That’s certainly something they need,’’ said Jessica Caldwell, an analyst with edmunds.com in Santa Monica, California. “They could really use not only something in this segment, but just more SUVs period. They’re pretty light on SUVs.’’
DRIVER ASSIST
The automaker is extending its driver-assist systems beyond its more expensive models, with Hyundai making the technology available on the Kona that includes features like forward-collision avoidance and lane keeping. The SUV will also have a head-up display that will project a virtual image to enable the driver to keep his eyes on the road.
Hyundai Motor currently has only two crossover models available for the global market, the full-sized Santa Fe and mid-sized Tucson. The automaker also offers a small SUV — called the Creta in India and ix25 in China — in selected emerging markets.
The carmaker has plans to expand its SUV lineup to eight models, including two under the premium Genesis brand, by 2020, according to Esther Yim, an analyst at Samsung Securities Co. in Seoul. That should help Hyundai Motor add 500,000 in annual vehicle sales and expand its share of the global SUV market to 6.8 percent, up from 5.7 percent currently, Yim wrote in a May 31 report.