Redesigned Hyundai Sonata Hits Trouble Out of the Gate

Discussion in 'OT Driven' started by TriShield, Mar 29, 2006.

  1. TriShield

    TriShield Super Moderator® Super Moderator

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    Sonata warning signs surface

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    Mark Rechtin Automotive News / March 27, 2006 - 6:00 am

    LOS ANGELES -- Last year, Hyundai Motor America touted the redesigned 2006 Sonata as capable of taking on the Toyota Camry and Honda Accord. Part of that was bringing its sales volume into the big leagues of 150,000 units a year.

    Yes, the Sonata is reaching its sales targets this year. But how Hyundai is getting those Sonata sales suggests potential long-term trouble for the automaker's volume leader.

    Hyundai is pouring vehicles into daily rental fleets. Retail incentives exceed the entry-mid-sized segment average
    , according to Power Information Network data. Worse yet, the Sonata takes more days to turn than the segment average. Its transaction prices are declining as well.

    Hyundai's goal of increasing the redesigned Sonata's sales by nearly 50 percent over the previous design's total - in a shrinking segment, no less - is a daunting challenge, acknowledges John Krafcik, Hyundai's vice president of product development and strategic planning. In 2004, Hyundai sold 107,189 Sonatas.

    Krafcik says the warning signs are being addressed, or can be readily explained.

    Since Sonata's launch last summer, about 30 percent its sales have been to daily rental fleets, according to CNW Marketing Research of Bandon, Ore. That is on the cusp of being dangerously high because it risks diminishing the brand's reputation, says CNW President Art Spinella.

    On the plus side, Hyundai is getting a "fairly decent" price for its fleet sales, Spinella says. "It's not a fire sale like Ford Taurus was at the end of its life."

    For a brand that has low awareness among shoppers, fleet sales can be a necessary evil, says Krafcik. He says Sonata fleet sales are right at the mid-sized sedan segment average.

    "We need to get butts in seats. Fleet is a way to do that."

    Just as important is getting more retail consumers to buy the Sonata.

    As for incentives, Hyundai has a $500 cash-back deal on the four-cylinder Sonata, and $1,000 on the V-6. It also has $1,000 cash for Hyundai owners, which accounts for about 30 percent of Sonata deals. There also is $1,000 for those who finance through Hyundai Motor Finance, about 60 percent of the deals.

    Data from the Power Information Network show Sonata transaction prices have declined since launch. In August, Hyundai's average transaction price was $19,805, but that has slid steadily to $18,868 in February. Krafcik says that is due to Hyundai's model mix leaning more toward four-cylinder engines.

    The increased days to turn comes from Hyundai cranking up its Alabama manufacturing plant in anticipation of Job 1 of the Santa Fe sport wagon.

    When the plant has to concentrate on starting Santa Fe production, Sonata output will decline. Krafcik said Hyundai was trying to get dealers enough inventory to carry them through the fallow months.

    Hyundai also is restructuring its pricing and options packaging by pulling forward its 2007 model year release. The 2007 model, which will arrive in May or June, will give the four-cylinder model more standard features and a realigned pricing structure.

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  2. TriShield

    TriShield Super Moderator® Super Moderator

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    So much for all the rave magazine reviews. :mamoru: :mamoru: :mamoru:

    It's fun to see all these media darlings go down in flames, like the Acura RL, Honda Ridgeline and this Korean POS.
     
  3. rockinpandas

    rockinpandas Active Member

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    not a hyundai....
     
  4. famous

    famous OT Supporter

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    i think that car looks great for the price, also the features/design inside are definitely better than a honda or toyota offering.
     
  5. IslanderOffRoad

    IslanderOffRoad Do you even lift kit? OT Supporter

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    hyundai... i still wont buy one.
     
  6. TriShield

    TriShield Super Moderator® Super Moderator

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    In for overcapacity in Alabama. :mamoru:
     
  7. spark plugs.

    spark plugs. beautiful. OT Supporter

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    poor Hyundai...you have no idea what this means to us...





















    wait, neither do i...:mamoru:
     
  8. Yep

    Yep Knick knack paddy whack, give the old dog a bone

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    So sales suck... who cares, it's still a beautiful car in my opinion. I was expecting to read about massive recalls.

    BTW - The reason their sales suck is because they aren't advertising the car enough. I don't see that many commericals for it on TV. Plus they dropped the XG300 and brought in the new Azerra I'm sure that doesn't help matters.
     
  9. TriShield

    TriShield Super Moderator® Super Moderator

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    If you really like it wait a little longer and they'll really be giving them away. :noes:
     
  10. Snowman

    Snowman I know the Benzes. OT Supporter

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    It did a nice job of stealing the Accord's styling.
     
  11. Jake!

    Jake! Guest

    pretty soon we'll be reading the same thing about their 30,000 "luxury" car
     
  12. TriShield

    TriShield Super Moderator® Super Moderator

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    Big surprise huh? :korea:
     
  13. TriShield

    TriShield Super Moderator® Super Moderator

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    Good thing the SK government gives them so much money. But that will probably end since all the Hyundai higher ups are in big trouble for being in bed with government officials. :mamoru:
     
  14. PleaseEatSomeShit

    PleaseEatSomeShit 1-900-RAT-FUCK

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    hai yun die yay
     
  15. Shiva Chaos

    Shiva Chaos i see boobies!

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    my sister-in-law bought one..... she thinks it's great.... until last week when it broke out of the blue:o
     
  16. TriShield

    TriShield Super Moderator® Super Moderator

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    Meanwhile the Ford Fusion continues to do very well in this segment without incentives. :mamoru:

    Even the horrible Five Hundred is warming. :eek3:
     
  17. mucky

    mucky .

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    Uhm...Ford Fusion has upto $1500 incentives. :hsugh:
     
  18. Ruination

    Ruination New Member

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    :bowdown: :bowdown: :bowdown:
     
  19. hsmith

    hsmith OT Supporter

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    it is amazing how far Hyundai has come in the last 5 years. They were a total joke in 2000, now they are becoming quite respectable.
     
  20. SilverJettaGLX

    SilverJettaGLX OT Supporter

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    In other words it's still a Hyundai
     
  21. Derek

    Derek OT Supporter

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    :hsugh:
     
  22. TireSmokinSRT

    TireSmokinSRT Bring in the stunt cock

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    that's too bad, it looked like they were getting their shit together.

    the sonata really isn't a bad alternative when you look at the price/features. plus it's not awful looking.
     
  23. DjShiznit

    DjShiznit Representing Deutschland, yah.

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    Hyundai sure has come a long way since the 80's. They seem to be doing pretty well now. Maybe they'll be able to shake their unreliability stigma
     
  24. brownfield

    brownfield OT Supporter

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    hyundai = ghey... even the tiburon fagmobile.
     
  25. Y2kAccord

    Y2kAccord Everything happens for reasons I just dont know

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    I drove one as a rental and it was a nice car to daily drive. I think people are still going to Honda/Toyota because its what they have always done.
     

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