Hyundai: A wave of SUVs in the Future
If Hyundai Motor America's president and chief executive officer David Zuchowski gets his way, you'll be seeing a lot more crossover SUVs wearing the Hyundai badge. During a wide-ranging discussion at the New York Auto Show, Zuchowski covered everything from the newly introduced Hyundai Tucson, the possibility of a Santa Cruz-inspired pickup truck, the new Hyundai Sonata, and just about everything else in the lineup not called Genesis. Yet time and again, Zuchowski came back to the importance of the truck and utility market in the U.S., and to Hyundai's bottom line.
Capacity Vs. Demand
When talking about the prospects for the 2016 Hyundai Tucson introduced at the New York show, Zuchowski noted that Hyundai North America couldn't get more of the previous model. "The existing Tucson has been a real frustration for us," he said. "We sell 40-45,000 per year. If we had the same segment share we do with other vehicles, where we're not limited by production constraints, we'd be selling double that."
But it goes deeper than just the Tucson. Right now, Zuchowski says about 56 percent of the U.S. market is in trucks, SUVs, and crossover SUVs. However, currently those markets account for only about 20 percent of Hyundai sales. "It's important to us to get additional production for existing entries, and new production for emerging segments. All of a sudden, our mix looks a lot more like the industry mix, and that will help us an awful lot," he said.
Crossover SUV Strategy
So what is Hyundai doing to up the crossover SUV ante? First, Zuchowski wants to double the number of Tucson models available for the U.S. market from the current 45,000 to about 90,000. And he thinks he'll get it, although not quite when production starts in May. "It's not finalized yet, because it may get better, but what we have right now is 50 percent [more]," he said. However, that may go up. "We think in our first full year, next year, we'll be able to get into that 80-, 85-, 90,000 range."
With the new Tucson growing in size, it opens up an opportunity in the subcompact crossover SUV segment. "We think the migration that we've seen over the past two years from the midsize car segment to the compact CUV segment is going to happen from the compact car segment to the subcompact CUV segment," he said. To that end, a model smaller than the Tucson "is in our approved product plan," Zuchowski said.
Santa Cruz: Concept to Reality?
Of course, when you talk trucks with Hyundai, the shapely and popular Santa Cruz Concept the company showed at the North American International Auto Show in Detroit can't be ignored. Zuchowski says the idea behind the concept was to gauge reaction from the media, consumers and dealers, and that the overwhelmingly positive response has translated into some serious consideration for the crossover truck. "There's been a tremendous amount of feasibility work and engineering work done on that," he says. "It's not officially in our approved programs yet, but we feel pretty good with all the work that's being done now that that's something we can get accomplished over the course of this year."
Helping things along is the fact that a production Hyundai Santa Cruz would be built off the same architecture as the new Hyundai Tucson, on the same line at Hyundai's Ulsan plant in Korea. That, along with the re-emerging market for smaller trucks as exemplified by the new Chevrolet Colorado, is among the many reasons why Zuchowski feels so confident about the truck's prospects. "We're all rowing in the same direction on that one and we're hoping to get this thing done before too long," he said.
Even though the Santa Cruz would target different buyers than midsize body-on-frame pickups like the Chevy Colorado and Toyota Tacoma, those trucks will influence pricing. "Santa Cruz is never going to be a vehicle where you're going to talk about payload, you're never going to talk about towing, you're never going to talk about ground clearance," he said. "You won't see them at the job site with sheetrock in the back. But it does need to be able to compete price-wise with vehicles that do that," noting that if those trucks are in the mid-$20,000 range, the Santa Cruz couldn't be priced beyond that. Even more speculative would be whether the concept's diesel engine would make it stateside. While Hyundai has a finger in every alternative-fuel pie there is -- including hybrids, plug-ins, and fuel-cell vehicles - diesel isn't a high priority for the U.S. But Zuchowski also mentioned that a prospective Santa Cruz would be "a place where it really made sense to bring one in."
Sedans Still Strong
With so much talk about crossover SUVs and pickup trucks, Zuchowski also noted that Hyundai's sedan lineup continues to do well. Sales of the new 2015 Hyundai Sonata stumbled slightly when it was introduced and some blamed the conservative styling. However, Zuchowski says it had more to do with a soft sedan market with several highly incentivized competitors against which the new Sonata debuted with little to no incentive spending. That's changed, and with more incentives on the Sonata, Zuchowski says sales are "doing great." Additionally, he said that Hyundai won't follow the Toyota Camry's lead with a major restyling for the Sonata's mid-cycle refresh in a couple of years.
That leaves the upcoming Hyundai Elantra, set to debut at the Los Angeles Auto Show in November. Zuchowski says will boast "Audi-esque" styling, with a premium look, and a specific focus on vehicle dynamics. Interestingly, despite the promise of better driving dynamics, the Elantra coupe won't be making a return to the lineup, although the Elantra GT's hatchback shape will continue. "Most compact cars do a coupe to provide a vehicle option that has style," he said. "But the Elantra four-door was such a stylish vehicle that you didn't need a coupe for a styling statement." The GT hatchback though is a different vehicle, with a dedicated buyer who is looking specifically for a five-door hatchback. "People aren't going to go looking for a red sedan, and see a red GT and buy the GT instead," he said, noting that its styling appeals to those looking at cars like the Volkswagen Golf or Mazda3 hatchback.