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Hyundai-Kia forecasts slowest sales growth in 8 years

Even with the arrival of the new Hyundai Genesis Sedan (above) and the expected introduction of at least two other new vehicles in 2014, Hyundai-Kia is estimating its sales will only increase by about 4.1 percent this year. Bloomberg has found that figure, which works out to a total of 7.86 million vehicles worldwide, to be lower than average analyst estimates of eight million vehicles. If the automaker is correct, that figure will represent the most sluggish growth for the Korean brands since 2006.
Based on an exchange rate of 1,050 won to the dollar - right now it's trading at anywhere from 1,050 to 1,052 depending on where you look - Hyundai is predicting a 3.8-percent uptick for sales of 4.9 million units, while Kia is expecting a 4.7-percent uptick for sales of 2.96 million units. That exchange rate is predicted to be part of what will hamper sales this year, with a stronger South Korean won making Japanese cars more price-competitive when cross-shopped. It's unclear how Hyundai derived its exchange rate, but 1,050 won to the dollar almost matches the 52-week high for all of 2013.
The company chairman mentioned a "low growth era" in the world economy, and weaker US sales are rumored to at least part of the reason John Krafcik recently vacated the post of Hyundai Motor America CEO, a post that has been filled by executive vice president of sales, David Zuchowski. That unexpected news capped a year in which two top execs resigned over quality issues and recalls and Hyundai agreed to settle a consolidated lawsuit over inflated fuel economy ratings for $395 million.

Hyundai Sonata's slow sales start to trigger more daring redesign

On paper, the latest Hyundai Sonata has been a winner. The sedan sold 216,936 units in 2014, around 13,000 more than the previous year, and the new model posted healthy year-over-year gains in both December and November. However, according to a report from Wards Auto, the Korean brand isn't happy with how the vehicle is doing and is planning a redesign, to be timed with the future refresh. Unveiled at the 2014 New York Auto Show, the latest Sonata has a more refined, almost luxurious air about it, and the sedan ditches the swooping styling from the previous generation. It also comes at a slightly lower base price. But the more mature design is also the problem. Hyundai Motor America CEO Dave Zuchowski told Wards during the 2015 Detroit Auto Show that the new model was "not as distinctive" as its predecessor. Previously, "people would seek us out because we look different. And we don't get that now," he said. While no details on the redesign were divulged, Zuchowski said the company was already at work on the shape. He suggested the changes would debut for the Sonata's refresh, likely in the 2017 or 2018 model years. Autoblog reached out to Hyundai about the possible design change and spokesperson Derek Joyce told us, "Dave was simply referring to our normal mid-cycle refresh where it's typical to make styling tweaks." According to Wards, the latest Sonata isn't conquesting as many buyers from other brands as Hyundai would like. The company reportedly raised incentives to get them to move. So while sales were up, the automaker was disappointed. AutoTrader senior analyst Michelle Krebs confirmed to Autoblog that incentives were high for the Sonata, but that had nothing to do with its design. "The midsize car segment has fallen out of favor with buyers who want utilities so they are carrying very heavy incentives. We expect that trend to continue and then some in 2015," she said. A previous report also claimed that the 2015 Sonata wasn't living up to sales expectations in part due to its more traditional styling. But the company shot down those claims because the sedan was still rolling out the entire range to dealers at the time. Even now, Hyundai is still adding the Sonata Hybrid and Plug-In to the lineup in the coming year.

Hyundai, Genesis, Subaru warn their dealers about markups

Six weeks ago, word got out that Ford's VP of sales for the U.S. and Canada wrote one of those "It has come to our attention..." e-mails to the automaker's dealer body. The VP's problem was dealers trying to get reservation deposits for the Ford F-150 Lightning well above the official $100 fee. The tomfoolery resulted in interactions "with customers in a manner that is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation." Two weeks later, GM told its dealers to cut out the reservation gaming and the markups on the 2023 Chevrolet Corvette Z06, banditry that's been going on for two years. Two weeks ago, Ford was back at it, this time about markups on the Bronco. Last week, Asian automakers swept into the melee, with Hyundai and Genesis, Subaru, and Infiniti writing letters to their dealers to deliver some variant of, "Stop pissing off the customers." Automotive News reported an SVP at Hyundai Motor America and the COO at Genesis Motor North America sent letters to their dealers expressing disappointment at "certain pricing practices which, if left unchecked, will have a negative impact on the health of our brand." One of the practices mentioned was dealer markups, another was the bait-and-switch, with dealers advertising one price then charging a higher price once the customer showed up at the lot. The letters acknowledged that dealers are separate companies to the automakers and have the right to set their own prices. The automakers cannot interfere with that; their leverage is distributing allocations and perks such as advertising support and financial incentives. So, like a movie boss letting the protagonist go on a technicality, the brands wrote, "we cannot stand idly by watching the actions of the aforementioned dealers undo all the efforts we collectively have put into making these brands what they are today." Jalopnik got tipped to a letter Subaru of America CEO Thomas Doll sent to that brand's dealers. Doll's polite yet insistent tone was the result of a letter a loyal Subaru owner sent to the automaker's VP of Customer Advocacy. In the market for a third brand-new Forester, the owner said they encountered a "tax" labeled a "Low Inventory Surcharge" of as much as $6,000, putting the Forester out of reach.