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Hyundai Says Sonata Sedan Demand Outstrips U.S. Plant Capacity

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May 15 (Bloomberg) -- Hyundai Motor Co., South Korea’s largest automaker, said demand for the revamped Sonata midsize sedan exceeds capacity at its U.S. factory and will restrain sales of the model this year.

Deliveries of the 2011 Sonata that went on sale early this year surged 57 percent in April to 18,536, surpassing Nissan Motor Co.’s Altima and General Motors Co.’s Malibu. That level may be unsustainable because the plant in Montgomery, Alabama, is the sole source for the U.S. and at capacity, said John Krafcik, chief executive officer of Hyundai’s U.S. sales unit.

“Demand is clearly above what we can supply at the Montgomery plant,” Krafcik said in a phone interview yesterday. “We’re already doing overtime and Saturday shifts.”

U.S. sales for Seoul-based Hyundai are off to record volume this year, rising 20 percent from a year earlier on demand for the Sonata and new Tucson crossover, and Santa Fe sport-utility vehicle. Hyundai has no plan to boost Sonata supplies with shipments from Korea because specifications differ for the U.S. version, he said.

Hyundai’s Alabama plant since last month lengthened both its daily production shifts to 10 hours from 8 on weekdays, said Robert Burns, a spokesman. The factory’s 2,700 workers also will work 10-hour overtime Saturday shifts today, he said.

“We’re working flat out to keep up,” Burns said.

Unlike Honda Motor Co. and Toyota Motor Corp., which use plants in Japan to meet surges in demand for some models, Hyundai’s goal for Sonata and Santa Fe is to supply the U.S. and Canada solely from Alabama. Sonata still trails Honda’s Accord and Toyota’s Camry.

Limited Supply

Sonata supplies at Hyundai’s U.S. dealers are at the “single-day level,” Krafcik said, meaning less than 10 days of inventory on hand. The car is unlikely to hold its lead over the Altima for the year because of tight supplies, he said.

“That was always going to be a stretch goal,” Krafcik said.

Hyundai’s U.S. sales unit is based in Fountain Valley, California. The company’s shares don’t trade on primary U.S. exchange. Hyundai rose 3,000 won, or 2. 1 percent, to 144,500 won in Seoul yesterday.

To contact the reporter on this story: Alan Ohnsman in Los Angeles aohnsman@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net.

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