Hyundai Says Engine Shortage Hampered Sales Goal
Hyundai imports 4-cyl. engines for its Sonata sedan from South Korea to the U.S. and does not receive supplies from Michigan, where the engine also is made.
DETROIT – Hyundai Motor America says it missed its half-million sales target last year because it could not get enough 4-cyl. engines.
“We really needed a lot of things to go right to hit 500,000, and one of them, unfortunately, was global engine capacity,” John Krafcik, vice president-product development and strategic planning-HMA, tells Ward’s in an interview here at the 2007 North American International Auto Show.
“That was one of the constraints we have in the company,” he says. “Sometimes it’s good to know your constraints well. We’ve put some things in place now to help alleviate that constraint, (which) should help us going forward this year.”
Krafcik says Hyundai specifically was hurt by a lack of 4-cyl. engines.
But this doesn’t mean the auto maker will get engines from the Global Engine Mfg. Alliance plant in Dundee, MI, where the 2.4L 4-cyl. World Engine for Chrysler Group’s Dodge Caliber is built. Hyundai co-developed the engine along with alliance partners Chrysler and Mitsubishi Motors Corp.
“I don’t think that’s in the plan,” Krafcik says.
Currently, Hyundai imports its 4-cyl. engines from South Korea for the Sonata sedan, built at the auto maker’s Montgomery, AL, plant.
When the ’08 Sonata goes on sale this spring, Hyundai will offer for the first time its 4-cyl. engine across the model lineup, including the SE and Limited trims. Previously the mill only was available in the base GLS model.
A slowdown in U.S. Sonata sales late last year was predicted, Krafcik says, adding Hyundai “front loaded” distribution channels in the first part of 2006.
Krafcik says the Sonata is Hyundai’s “focus fleet vehicle” and isn’t afraid to admit the growing Korean auto maker needs fleet sales to drive interest in the brand.
“I really, truly believe fleet is a good way to expose the customer (to Hyundai),” he says, adding fleet sales accounted for 15% of Hyundai’s total 2006 sales of 455,520 units. However, Krafcik says Hyundai is hoping to reduce its fleet mix to the 10%-15% range this year.
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