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How Hyundai lost momentum, and will 'take a few years' to recover

SEOUL/DETROIT/CHONGQING, China — At a near-empty Hyundai Motor showroom in the Chinese mega city of Chongqing, the store manager is grumbling about his shortage of customers and a lack of bigger, cheaper SUV models popular in the world's largest auto market. Even with discounting of as much as 25 percent, his dealership was selling barely a hundred vehicles a month, said the manager surnamed Li. A nearby Nissan dealership was selling about 400 vehicles a month, a store manager there said. "The sales are simply poor," Li told Reuters. "Look at the Nissan store next door, they have tens of customers while we just have two." An hour's drive away is Hyundai's massive $1 billion manufacturing plant, which opened last year with a target to produce 300,000 vehicles per year. But with sales weak and the Chinese auto market slowing sharply, the factory is running at roughly 30 percent of capacity, two people with knowledge of the matter said. The sources asked not to be identified because the information was not public. Hyundai, the world's fifth largest automaker, declined to comment on the Chongqing plant's production or the showroom's sales but said it is "closely cooperating" with local partner BAIC to turn around the China business. BAIC did not respond to requests for comment. Hyundai's woes mark a major reversal for the automaker which was an early success story in China as it quickly and cheaply rolled out popular new models into a surging market. In 2009, Hyundai and partner Kia's combined sales ranked third in China after General Motors and Volkswagen. The South Korean duo now ranks ninth, and its market share in China was 4 percent last year, from more than10 percent at the beginning of this decade. Executives and industry experts say Hyundai conceded its once stronghold in the low-end segment to fast-growing Chinese rivals such as Geely and BYD. Foreign rivals not only defended their turf in premium segments but also kept pricing competitive for mass-market models, squeezing Hyundai's positioning as an affordable foreign brand, they said. In the United States, the world's second-biggest auto market, Hyundai's market share fell to 4 percent last year, near a decade low. Hyundai ran into problems in China and the United States for similar reasons: It missed shifts in consumer tastes, especially the surge in demand for SUVs, and it sought higher prices than its brand image could command, four Chinese dealers and half a dozen former and current U.S.

Super Bowl car commercials: Follow along as we riff on them live

Join Autoblog editors Sunday starting around 6:30 p.m. ET as we react to all of the car commercials during the game. We know Hummer, Porsche, Hyundai and others will have splashy ads, and naturally, there's usually a few surprises. Whether you're a Chiefs or 49ers fan — or don't care about football — the commercials are always a highlight. And for us, the car spots are the most intriguing. Weigh in with your own thoughts in the comments section. Let's kick off.   FIRST QUARTER Editor-in-Chief Greg Migliore liveblogs the first quarter. F9 We'll count this as a car commercial. The latest edition of the Fast & Furious looks like it well, will have cars. We'll punt on further comment. PORSCHE I like it. Creative. Sort of a Night at the Museum feel. The guards stage a theft and then a car chase. The Taycan looked good. Get fired up — the future for Porsche is electric. The spot is meant to illustrate how fun that can be. I don't need any convincing.    SECOND QUARTER Associate Editor Byron Hurd is liveblogging the second quarter.  HYUNDAI Hyundai checked in super early with their Sonata "Smaht Pahk" commercial, which manages to score points for being both cute and clever while also being a fairly good commercial in a vacuum. We saw it last week, so there were no surprises here, but we enjoyed it nonetheless.  Fun note: If you go to the Sonata landing page on Hyundai's web site, you can choose "plain old English" or "the Boston way" for your language; the latter will translate the page. Enjoy.  FORD Hi ho, West Coast Editor James Riswick here. Apparently, the guys in Detroit didn't get the Mustang Mach E ad featuring Idris Elba and a whole boat load of awesome old Mustangs. Pretty sure it's bound to be viewed the exact same way as the car itself: traditionalists will be aghast, while non-car people will be intrigued by a new, all-electric, crossover version of one of the few cars they've heard of.  GENESIS They're coming more rapidly now. Genesis gets some love thanks to Chrissy Teigen and John Legend; this was another known quantity, but Hyundai's luxury brand managed another solid entry here thanks to its choice of stars. Teigen and Legend got the chance to throw back to the latter's "Sexiest Man Alive" honors, which Teigen often teases him for. Another solid all-around spot.  GMC/HUMMER Are there just no surprises left? Don't tell me; I know the answer. LeBron James fronts the revived Hummer, which will be an EV sold as a GMC.

Hyundai looking to add plant in Mexico

Mexico is rapidly becoming the go-to place for North American auto production, and companies including Toyota, General Motors, and Audi are all building new plants, expanding or shifting some production there. Now, Hyundai is investigating joining them in the future. "I'm sure that over the years we'll see production of Hyundai products in Mexico," Pedro Albarran, managing director for the automaker in Mexico, said to Bloomberg. Albarran indicates that a likely location for such a factory might be the state of Nuevo Leon, where Kia also has a forthcoming $1 billion plant. The site would be an ideal location near suppliers. It's probably going to be a while before any of Hyundai's models start coming out of Mexico. According to Bloomberg, the automaker wants to wait to make a final decision until sales there reach around 50,000 annual units, and that benchmark isn't expected until 2018. While Kia's plant is slated to have a capacity around 300,000 vehicles a year when it opens in 2016, Albarran thinks Hyundai might start smaller at just over 100,000 annual examples. Some of those would likely include subcompact models for the Mexican market. The Korean automaker was rumored to be looking into a factory south of the border as far back as 2013.