Hyundai chief visits U.S. to push for better sales
Chung, who leads the world’s fifth-largest automotive group, left Korea for the United States on Tuesday in his private jet. This is the first time in 15 months that the 76-year-old chairman has taken a business trip to check on his group’s progress in the United States, the world’s second-largest auto market.
At the Hyundai Motor America headquarters in Fountain Valley, California, Chung told American executives that the company needs to take pre-emptive measures in the U.S. market, where Japanese brands are boosting their marketing activities due to the weak yen. Japanese automakers combined sold more than 3.6 million units in the United States in the first seven months of 2014, up 6.8 percent from a year ago.
Hyundai Motor and Kia Motors sold 781,167 vehicles in the United States over the same period, up 3.7 percent from a year ago. The two automakers are aiming for combined sales of 1.33 million vehicles in the United States this year, up 6 percent from 2013.
Though their main models overlap with Japanese brands in the United States, Korea’s two largest automakers have also been suffering from the strong Korean won. Hyundai’s operating profit plunged 13.3 percent year-on-year to 2.08 trillion won ($2 billion) in the second quarter, while its small affiliate Kia reported operating profit of 769.7 billion won, a 31.7 percent year-on-year drop.
“We can’t ignore our efforts to provide a ‘reasonable price tag’ just because competitors are rolling out discounts,” Chung said. “We will get bigger opportunities if we are not shaken by market changes in the U.S., but calmly counteract in advance.”
The chairman was confident that Hyundai and Kia can increase sales of midsize and large-size sedans in the United States, with the release of a new edition of the Sonata and Genesis.
“If we can overcome the difficult business environment by increasing sales of mid- to large-size cars, we will be able to position ourselves as a brand that can pursue sustainable growth in the U.S.,” Chung said.
According to Hyundai, sales of midsize or large vehicles accounted for 53 percent of its U.S. sales last year, and this year the portion has increased to 56 percent. In June, 62.3 percent of its sales were midsize or larger, thanks to the release of the new Sonata.
Although the Sonata is still behind its rivals Toyota Camry, Honda Accord and Nissan Altima, its sales are steadily increasing. This year, 128,914 Sonatas have been sold in the United States, up 5.8 percent from a year ago.
Genesis sales are also increasing. The premium sedan’s monthly sales were about 800 units earlier this year, but after the second generation was released in May, it is now selling more than 2,000 per month.
Hyundai’s small affiliate Kia is also trying to contribute to the trend with the release of the Cadenza (K7 in Korea) and K900 (K9 in Korea).
“I want employees to work with sense of duty that increasing car sales in overseas is a way to contribute our country’s economy,” Chung said.
BY JOo KYUNG-DON [firstname.lastname@example.org]