With sales of crossovers and sport-utility vehicles climbing in the U.S., Hyundai Motor is considering developing a larger sport-utility vehicle based on its Genesis luxury sedan, according to reports surfacing in South Korea.
It wouldn’t hit dealer showrooms for two or three years at the earliest. However, the South Korean firm’s worries over a lack of brand power in the higher-priced SUV segment and whether oil prices could surge again and erode the market for gas-guzzlers may scuttle the program, according to Reuters.
Dave Zuchowski, chief executive officer of Hyundai Motor North America, told TheDetroitBureau.com recently that the South Korean automaker is very close to moving forward with a new pickup truck based on concept vehicle shown at the North American International Auto Show in Detroit this past January and adding a new small crossover vehicle to its model line.
Hyundai’s top executives have concluded that the key to the company’s sales growth depends on expanding its truck line, he said.
John Murphy, the top analyst with Bank of America Merrill Lynch, said the latest edition of Merrill Lynch’s “Car Wars” study indicated that Hyundai was in danger of losing marketshare to other automakers primarily because it lacks offerings on the truck side of the business.
(Hyundai plugs and plays with Android Auto in new Sonata. For more, Click Here.)
“There is a very high probability we get the approval of the truck soon,” Zuchowski said during a conversation with reporters as Hyundai prepared for the rollout of the new Sonata hybrid.
Zuchowski also said Hyundai is in the process finishing a study of its capacity needs in North America. “There should be an announcement” soon, he noted, adding the automaker is expected to expand capacity in the U.S. rather than Mexico where its sister company, Kia, has opted to build a new assembly plant.
The addition of the new truck based on the Santa Cruz concept vehicle and a small crossover to compete with vehicles such as new Honda HRV, the Jeep Renegade and the Chevrolet Trax will create new opportunities for Hyundai.
“This is a growth segment,” he said. “We want a piece of it.”
(Click Here for details about Hyundai’s plans for a new truck and CUV.)
Hyundai took it lumps last month with sales falling more than 10%. So far this year, Hyundai sales have increased by 2%, but the maker has lost share as industry-wide sales have increased by 4.5% with a strong showing this spring, according to Autodata.
Overall trucks and utility vehicles have increased by 10% this year now account for more than 56% of all vehicles sold in the U.S., according to IHS Automotive, as the shift towards trucks has accelerated this year with the drop in fuel prices.
Sales of a large SUV based on the Genesis, however, could be a more difficult to sell to Hyundai’s senior management, which looks carefully at all sides of an issue. “We are timid when it comes to bigger SUVs,” said the person familiar with Hyundai’s vehicle development told Reuters. The official did not want to be named as he is not authorized to speak to the media.
(To see more about Hyundai possibly adding a second U.S. plant, Click Here.)
The Genesis has been one of the bright spots in the Hyundai line with sales increasing by more than a third in January-May to nearly 15,000, far outpacing Hyundai’s overall sales gains of just 2%.