Hyundai Motor Co. may develop a large premium sport utility vehicle to cater to growing demand for the segment, after sales of its lineup of predominantly sedans slumped.
South Korea’s biggest automaker is looking into introducing a bigger premium SUV and hasn’t decided which vehicle platform it will be based on, the company said in an e-mail. Reuters reported the SUV plan earlier on Monday.
Hyundai, which offers 10 sedans and four SUV models in its home market, has missed out on a worldwide boom in utility vehicles sparked in part by a decline in gasoline prices. A stronger won is also undermining the company’s ability to compete against the likes of Japan’s Toyota Motor Corp. in key markets including the U.S.
“The target market for the vehicle will probably be the U.S., where SUVs have been very popular lately,” Kim Dong Ha, an analyst at Kyobo Securities Co., said by phone. “Developing a bigger SUV will help Hyundai reinforce its line-up but the fuel prices will remain a variable. That is, a bigger SUV will need the fuel price to remain low for it to be successful.”
Hyundai shares fell 2.6 percent as of 12:06 p.m. in Seoul trading today. The stock has slumped 21 percent this year.
None of Hyundai’s vehicles ranked among the 10 best-selling SUVs in the first quarter in China, its biggest market. In April, Hyundai showed a version of its revamped Tucson SUV at the Shanghai auto show, and said June 2 it will introduce its new Creta SUV in India in the second half of this year.
Hyundai and its affiliate Kia Motors Corp. trail the industry in the U.S. with only 70 percent of models due to be replaced through 2019, according to a Bank of America Corp. analysis of new-model plans. Honda Motor Co. is in the best position to gain U.S. market share as it replaces vehicles representing about 96 percent of current delivery volume.