Hyundai Blames Lower Incentives, Declining Segment for Sonata Drop
The U.S. sales and marketing arm of the South Korean automaker expects a better second half for its midsize sedan, whose sales were down 9.9% through June.
July 22, 2015
MINNEAPOLIS, MN – Sales of Hyundai’s 1-year-old Sonata midsize sedan were down 9.9% in the year’s first half and 42.1% in June.
Normally falloffs that large would be cause for panic at an automaker, but Hyundai Motor America’s chief executive isn’t worried, and says the situation isn’t as bad as it may appear.
Despite the car’s poor showing in the first half, Dave Zuchowski still expects 2015 Sonata volume to outdo 2014’s 216,936 deliveries.
“I think we overheated a little bit on Elantra, to the point where it hurt Sonata,” he tells WardsAuto here in an interview during a ’16 Tucson media preview.
Hyundai is selling down the current-generation Elantra in anticipation of a new model due later this year and in June had more aggressive incentives on its compact car while lowering the Sonata’s spiffs.
For July, HMA has balanced the two by increasing incentives on Sonata. Halfway through this month the “Sonata’s doing great,” Zuchowski says.
He claims if fleet sales are eliminated, the Hyundai D-size sedan is one of just two models in its segment, along with the Chrysler 200, to gain market share this year.
“Despite the fact our sales are down, they’re down 1% vs. a segment that’s down 9%,” he says.
WardsAuto places the Sonata in the Lower Middle segment. Data for the group includes fleet and retail figures and shows a worse sales decline for the Sonata than the segment through June, 9.9% compared with 3.8%, respectively.
The Sonata’s market share within the Lower Middle segment fell to 8.0% through June from 8.5% in first-half 2014.
The 200, as well as the Kia Optima, Mazda6, Nissan Altima, Subaru Legacy and Toyota Camry, have increased their share within the Lower Middle group in the year’s first six months.
Meanwhile, the Sonata, Chevy Malibu, Ford Fusion, Honda Accord and Volkswagen Passat are down vs. like-2014.
Zuchowski says Americans increasingly favoring CUVs and competitors with better name recognition and whose brands have deep pockets mean the “midsize segment is really under attack right now.
“It’s just tougher to grow in a declining segment, and you know Camry and Accord and Altima, they’re all going to be very competitive.”
The executive told WardsAuto earlier this year the less daringly styled new Sonata also was to blame for underwhelming 2014 sales, and that Hyundai would spice up the car’s sheet metal with its midcycle refresh, scheduled for the ’17 or ’18 model year.
Hyundai this summer begins retailing a new generation of the Sonata Hybrid, and in the fall launches the all-new Sonata plug-in hybrid.
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