LA JOLLA, CA – Hyundai continues to need more units of its Tucson model in the U.S., as the small CUV is in high demand.
Sales of the Tucson were up 24.9% January through July, and 51.5% in the month of July alone, when it sold a best-ever monthly tally of 11,257. Inventory in late July was 62 days, WardsAuto estimates, below the 68 day-supply average for light trucks last month. That's an improvement from April and May days’ supply of 59 and 57, respectively, but a bit down from June’s 67.
This year, Hyundai Motor America has been able to secure more Tucsons from its Ulsan, South Korea, plant, which assembles the model for the U.S., but it hasn’t been enough and it is looking for more, Mike O’Brien, vice president-product, corporate and digital planning for HMA, tells WardsAuto.
“Even though we’ve been increasing our allocation of production devoted to our market, it’s still something our dealers want more of,” he says. “We have the capacity to sell many more of those. Our biggest problem is not nearly enough of them. We’ve been suffering that since the very beginning.”
The current third-generation Tucson went on sale in summer 2015, with Hyundai then projecting it wouldn’t have enough units to meet U.S. demand. Rumors of North American production of the Korean-built vehicle, possibly via an expansion of Hyundai’s Montgomery, AL, plant, have yet to come to fruition.
The success of the Tucson is a rare bright spot for Hyundai in the U.S. this year. Brand sales are off 13.4% from January-July 2016 with the Tucson only one of two models in Hyundai’s lineup in the black vs. year-ago. The other? The Santa Fe midsize CUV, with volume running 1.4% above year-ago.
The Tucson’s January-July tally of 62,964 placed it first in sales in WardsAuto’s Small CUV segment, overtaking the Jeep Renegade which was the first-half leader. Some 61,885 Renegades were sold through July.
However, against other C-segment-based CUVs the Tucson has room to grow.
Toyota delivered 226,570 RAV4s through July, while Honda sold 219,017 CR-Vs. WardsAuto categorizes the Tucson as a small CUV as it is a few inches shorter in overall length than most C-segment-based competitors, most of which have grown to midsize proportions and fall into the Middle CUV segment.
Despite size constraints, O’Brien believes the Tucson is in the “sweet spot” of what vehicle buyers want at the moment.
“It’s got the right look, it’s got the right size and the right performance and value – and the right technology – in one package,” he says.
With the Tucson’s tally, as well as the 72,761 Santa Fe CUVs sold, Hyundai’s first-half light-truck share rose to 40%, up from 28% year-ago. That puts them ahead of some marques in light-truck share, a rare occurrence given they have been well behind. Some 63% of the 9,809,723 total light-vehicles sold through July in the U.S. were light trucks.
Hyundai’s gain in light-truck share equeates to losses in car sales. Through July, Hyundai sold 22.6% fewer cars, or roughly 70,000 units less, than in the first seven months of 2016.
HMA is hopeful the refreshed Sonata midsize sedan, now arriving at U.S. Hyundai dealers, can reverse that car’s 30.5% through-July slide. The automaker is trying to recapture the allure of the highly styled seventh-generation Sonata of ’11-’14 with the refreshed eighth-gen model.
HMA also believes its forthcoming subcompact CUV, the Kona, can boost sales. However it won’t arrive until spring 2018 and initially will be imported in low numbers from Korea.
While O’Brien is optimistic about the Tucson’s continued potential, he cautions any brand looking to CUVs as saviors is increasingly facing a tough environment. In the current new-vehicle sales downturn, warning signs are appearing for the trendy models.
“If you look at days-to-turn, if you look at incentive-as-a-percent-of-MSRP, you’re seeing tremendous stabilization going on across the market now. A year ago the incentives were higher on cars, days-to-turn was higher on cars, supply was higher on cars. And now, just in the last few months, you’re seeing the numbers for CUV and SUV climb, and pickup also. They’re becoming much closer to sedan.”
As an example of this, Hyundai was offering nearly the same amount of cash back on a ’17 Santa Fe CUV last month ($3,000) as on a ’17 Sonata sedan ($3,350), per Edmunds.com.
