Hyundai Motor Co. expects to sell at least 700,000 vehicles this year in the United States despite reeling from tight supplies, according to John Krafcik, head of Hyundai's North American operations. The company sold 645,691 cars and SUVs in the US in 2011, a 20% increase from 2010. Krafcik said that Hyundai Chairman Chung Mong-koo has limited the company’s production capacity around the world, forcing plants to squeeze additional output from the current production schedule.
Chung limited the company’s annual global capacity at around 7 million vehicles.Krafcik said that the chairman’s intention in capping the production was to focus on the quality of Hyundai’s vehicle. It should be noted that Chung played a major role in shifting the company’s focus on quality since taking over in 2000.
Krafcik remarked that once the chairman is satisfied with the quality of the vehicles produced from their plants, Hyundai will then begin increasing their capacity to widen the supply base. The company currently builds some of its models at its plant in Montgomery, Ala. while affiliate Kia Motors also produces Hyundai cars in its factory in West Point, Georgia.
As for its sales strategy for 2012, Krafcik, who was at an event to present the new Azera and redesigned Genesis coupe, said that Hyundai is shifting its sales focus from fleet customers, which includes retail companies, to retail customers.
According to Krafcik, fleet sales are less profitable and accounted for only 10 percent of the total US sales in 2011. Hyundai is planning to cut the figure by half to around five percent, which means the company has to shift up to 100,000 sales to retail.
Krafcik admitted not knowing all the details (particularly the timeframe) that Chung has in mind for increasing the company’s production capacity. Krafcik expects Hyudai’s market share to remain the same or to increase, after the company’s slice dropped from 5.1% by the end of 2011 to 4.7% by the end of the first quarter of 2012.