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Hyundai October Sales ‘Looking Positive’

While Steve Wilhite is happy with U.S. growth this year, he is disappointed at the shortage of small cars from South Korea.

SANTA MONICA, CA – After a rare falloff last month, Hyundai Motor America sales are getting back on track, a company official says.

“October is looking positive,” Steve Wilhite, chief operating officer-HMA, tells Ward’s in an interview at a media event here. “It’s not as strong as we’d like, but we’ll be up over last year.”

Hyundai’s U.S. sales fell 16.0% in September to 33,384 units, which it blames on too much demand and not enough supply, mainly for its Accent and Elantra small cars, as the subcompact and compact segments continue their momentum.

Wilhite says it’s frustrating to see Toyota Motor Sales U.S.A. Inc., American Honda Motor Co. Inc. and Nissan North America Inc. bring their subcompact models to market and gain share as Hyundai struggles to get enough Accents.

“If you look at Toyota with the introduction of (the) Yaris, there’s 50,000 units this year that didn’t exist last year,” he says, noting the Honda Fit adds 21,000 units and the Nissan Versa brings 11,000.

“As (these competitors) are introducing product, we’ve got brilliant product – a reputation in that segment – and we’re just not able to get the availability.”

“The good news is Montgomery (AL, the location of Hyundai’s sole North American vehicle assembly plant) has the capacity to add at least one more product line to the plant,” Wilhite says.

Montgomery began building the new Sonata midsize car last year and this year added the Santa Fe midsize cross/utility vehicle.

While Wilhite is not sure whether current plans call for adding another vehicle to the Montgomery lineup, “I’m pretty confident we’re making the right decisions for allocation of resources going forward into next year,” he says.

Hyundai America told its dealer body last week it will fall short of its 500,000-unit sales goal this year but is aiming for 550,000 sales for 2007.

Wilhite says he’s pleased with Hyundai’s sales to date (up 2.9% through September) but disappointed “when I think about what the potential was. If we had gone through the full year, with full capacity in all car lines, this would have been a terrific growth year for us.”

The new 2L 4-cyl. Elantra, unveiled to the media here, is the last model in Hyundai’s plan to introduce seven new products in 24 months.

The auto maker predicts Elantra will sell 100,000 units in its first full-year, which is a drop from recent years. Hyundai sold 116,336 Elantras in the U.S. in 2005, Ward’s data shows.

John Krafcik, vice president-strategic planning and product development, says the shortfall is based on available capacity.

The ’07 Elantra begins at $13,995 for a base GLS model. The drop in price, from $14,665 in the ’06 model year, largely is due to the lack of standard air conditioning, which Hyundai says was a request made by its dealers in the Pacific Northwest.

An SE model begins at $16,295 and a well-equipped Elantra Limited is $17,295, up from $16,515 for the ’06 model.

Hyundai expects the GLS trim to account for 70% of total Elantra sales. GLS has high-end standard features such as heated side mirrors and power windows and door locks.

The SE adds a leather-wrapped steering wheel and shift knob, 16-in. alloy wheels and steering wheel audio controls. The top-of-the-line Limited comes standard with leather seating and heated front seats. An upgraded 220-watt audio system is available.

All Elantras have six standard airbags and antilock brakes, as well as a standard auxiliary jack, a Hyundai first the auto maker hopes to roll out to all of its U.S. models in the next 12 months.

While marketing will target younger buyers, Hyundai expects Elantra buyers to average 47 years of age, with an annual household income of $55,000. About 40% will be male, and 58% will be married.

The average buyer age of the ’05 Elantra was 51, while compact-car buyers typically are 44 years of age, Krafcik says.

Elantra’s national advertising campaign will debut in January.

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