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Hyundai’s U.S. Sales Surge as Industrywide Gains Elude Toyota

A customer speaking with a salesman in the showroom at Garvey Hyundai in Queensbury, New York. Photographer: Michael Fein/Bloomberg
A customer speaking with a salesman in the showroom at Garvey Hyundai in Queensbury, New York. Photographer: Michael Fein/Bloomberg

Dec. 2 (Bloomberg) -- Hyundai Motor Co., the fastest growing mass-market auto company in the U.S., posted a 45 percent sales gain last month on the strength of its Sonata sedans and Genesis luxury cars as Toyota Motor Corp. missed out on resurgence in demand.

Hyundai’s sales grew to 40,723 vehicles in November, a record for the month. Toyota’s sales fell 3.3 percent, the sole decline among major automakers, and second consecutive monthly drop for the world’s largest car company. Honda Motor Co.’s sales rose 21 percent and Nissan Motor Co.’s grew 27 percent.

“Sonata has done phenomenally in the midsize car segment,” said Jeff Schuster, director of forecasting at researcher J.D. Power & Associates in Troy, Michigan. “Camry and Corolla really underperformed last month, which I think has to do with very competitive vehicles.”

Hyundai’s gains came as industrywide sales increased 17 percent in November, led by demand for pickups, crossovers vehicles and other light trucks. Seoul-based Hyundai’s surge this year coincided with Toyota’s efforts to reassure U.S. buyers about its quality after record recalls and the strengthening of the nation’s currency to a 15-year high against the dollar, which trims the competitiveness of its exporters.

12.3 Million Rate

Toyota fell 0.5 percent to 3,295 yen in Tokyo as of 12:36 p.m. Honda rose 2.1 percent and Nissan gained 2.5 percent. Hyundai Motor shares fell 0.6 percent in Seoul.

Industrywide light-vehicle sales continued at an annualized 12.3 million rate for a second month, the fastest pace since the U.S. government’s “cash for clunkers” program in 2009, said Autodata Corp. Asia-based brands boosted sales 16 percent to 400,358 vehicles, trailing the industry’s 17 percent increase. As a result, Japanese and South Korean carmakers’ market share fell 0.5 percentage point to 45.8 percent, Autodata said.

Among the U.S.-based makers, GM reported an 11 percent sales gain, Ford Motor Co. posted a 24 percent increase and Chrysler Group LLC said it had a 17 percent advance.

Toyota sold 129,317 Toyota, Lexus and Scion vehicles last month, down from 133,700 a year earlier. The Toyota City, Japan-based company’s decline was led by its top-selling Camry and Corolla cars, down 24 percent and 26 percent, respectively.

“Toyota used to be the default brand choice, but now consumers are looking around, checking out Hyundai and Kia and liking what they see,” said Rebecca Lindland, an industry analyst with IHS Automotive. “Market share is up for grabs.”

Camry, Corolla Drop

The drop for midsize Camrys and Corolla small cars was the result of tougher competition and a decision to reduce sales to fleets, said U.S. Group Vice President Bob Carter.

“We had a significant decline in fleet volume for the month, in fact it was the lowest level of the year,” he said in a conference call yesterday. Sales to fleets, which tend to be less profitable, fell 58 percent, accounting for just 6 percent of Toyota’s U.S. deliveries last month, Carter said.

To boost sales in December, the company has begun a year-end campaign that will focus mainly on no-interest loans and discounted leases, he said.

Toyota’s market share for the month was 14.8 percent, down from 17.9 percent a year earlier, according to Autodata.

The company is repairing more than 8 million vehicles this year to fix problems relating to unintended acceleration and has continued to recall Lexus and Toyota models for other defects.

“There’s still lingering concern, some impact Toyota is feeling from its recalls,” J.D. Power’s Schuster said.

‘Brand Perception’

Sales at Hyundai, South Korea’s largest automaker, increased from 28,045 a year earlier. Sales surged 72 percent for the Sonata sedan, while Tucson crossover volume more than tripled.

Kia Motors Corp., partly owned by Hyundai, reported a 48 percent gain to 26,601 vehicles for the month, on higher sales of Soul wagons and Sorento SUVs.

“Brand perception has improved fast in the U.S. after Hyundai and Kia started to sell new models that have improved quality,” said Cho Soo Hong, an analyst at Woori Investment & Securities Co. in Seoul. “The global financial crisis and Toyota’s recalls also helped speed up narrowing the gap between consumers’ perception and actual quality improvement made in Hyundai and Kia cars.”

Hyundai’s market share grew to 4.7 percent, from 3.8 percent a year earlier. In the year’s first 11 months Hyundai’s U.S. sales rose 23 percent, the biggest gain among high-volume brands.

Hyundai, Kia

Combined sales in the U.S. for Hyundai and Kia, which share vehicle platforms, powertrains and a chairman, top those of Nissan’s this year through November, at 819,250 compared with 814,840 for Nissan. If the lead continues in December that would rank the partner companies sixth in U.S. sales volume for the first time, behind GM, Ford, Toyota, Honda and Chrysler.

Japanese automakers are also hampered by the strong yen. The currency has risen 11 percent against the dollar in 2010 compared with a 1.1 percent rise for the won. A stronger currency reduces the competitiveness of exports and the yen-value of profit made outside Japan.

Operating profit at Toyota, which exports a higher ratio of vehicles than Nissan or Honda, is cut by 30 billion yen ($357 million) for each one yen appreciation of the Japanese currency against dollar.

Honda, based in Tokyo, delivered 89,617 Honda and Acura brand vehicles, an increase from 74,003 a year ago. Sales rose 37 percent for the revamped Odyssey minivan and 31 percent for the compact CR-V crossover. The Accord car, Honda’s top-selling U.S. model, had a 10 percent increase. The company’s Acura brand had a 22 percent increase, aided by higher sales of TSX and TL sedans and MDX SUVs.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at

To contact the editor responsible for this story: Kae Inoue at

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