Hyundai Making Progress on CUVs, Although Maybe Not Fast Enough

Since former Hyundai Motor America CEO Dave Zuchowski left two weeks ago, either of his own free will or not, his departure has been blamed on CUV sales, specifically the lack thereof.

But the brand actually made good progress last year with the two nameplates it has, an analysis of WardsAuto data shows.

Sales of Hyundai’s midsize Santa Fe CUV, which comes in 2- and 3-row variants, were up 10.8% through November 2016 vs. same-period 2015 to 120,395.

The compact Tucson CUV did even better. Redesigned in 2015, deliveries rose a whopping 46.6% through November to 81,037, up from 55,280 year-ago.

No other mainstream brand saw as sharp an increase for its C-sized CUV January-November, save for Hyundai’s sister marque Kia, whose Sportage model jumped 57% ahead of year-ago, with 74,859 sold in the period.

What’s more remarkable is Hyundai has achieved the 2016 CUV increases with relatively scant inventory.

In eight of the year’s 11 months, Tucson inventory was below the light-truck industry average, which generally ranged from the 60s to low 70s, WardsAuto data shows. Tucson days’ supply was better than average in August and September, while in June it was on par at 68 days.

The Sante Fe, which is both imported from Korea and domestically built at Hyundai’s Montgomery, AL, plant, has been in a tighter situation. Santa Fe days’ supply has ranged from a low of 33 days in late June for imported models to a high of 107 in April for Alabama-built models. The latter figure is pretty rare. Throughout the summer and early fall Santa Fe days’ supply typically was in the 30s and 40s.

Hyundai can take some solace in the Tucson’s and Santa Fe’s increases, but on total volume the brand still lags competing models.

While its growth slowed last year, rising just 1.6% through November, Honda’s rival CR-V still racked up 319,557 sales in the period. Toyota’s RAV4 wasn’t far behind, with 314,925 deliveries from January to November. Even Subaru delivered twice the number of Foresters (160,578) in the 11 months as Hyundai sold Tucsons.

Meanwhile, the Santa Fe, while besting the sales of Honda’s Pilot (108,700) and just 500 units shy of Ford’s Edge (121,897), lagged by almost 100,000 units Chevy’s Equinox, the best-selling model in WardsAuto’s Middle CUV segment through November with 215,000 sold.

Toyota’s Highlander (165,954) and Subaru’s Outback (162,203) also outsold the Santa Fe in the period.

Last January, Zuchowski told WardsAuto Hyundai hoped light trucks would comprise one third of its U.S. sales in 2016. “By the end of this year, if we get what we think we’re going to get in terms of incremental production, that’s going to give us 250,000 CUVs and that’ll get us a 30%, maybe 32%, truck mix.”

But, barring a killer December, light-truck share likely will fall just a bit short. Hyundai’s 201,432 Santa Fes and Tucsons are 28% of the brand’s 707,485 total volume through November. Total industry light-truck sales tallied 9.5 million through November, or 60% of total light-vehicle sales.

It appears close wasn’t good enough for the senior leadership at Hyundai, who dismiss executives more frequently than perhaps any other automaker. But Zuchowski arguably did the best he could with what he had.

His permanent successor will have his or her hands full because the automaker still needs more light-truck inventory (although reportedly it is redirecting exported CUVs from the Middle East to the U.S. to fulfill demand) and the brand isn’t scheduled to launch its new small CUV in the U.S. until late 2017.

Most of the competitors B-CUVs went on sale in the U.S. in 2014 and 2015 and in many instances are adding 70,000-100,000 units of incremental volume to those brands’ lineups.

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