Hyundai picking up share as customers look for cheaper cars

Hyundai is taking advantage of the tough economic times to pick up market share in the United States. In August it accounted for 8 percent of new vehicle sales, selling more than 60,000 vehicles, many of them in conjunction with the government's cash-for-clunkers program.

The Hyundai-Kia Automotive Group owns the Hyundai Motor Company and 39 percent of Kia Motors. It is now the fourth-largest automaker in the world, after Toyota, General Motors and Volkswagen and expects to sell more cars in the US than it did in 2008. Sales by all of Hyundai's big competitors have fallen by 20 percent this year so far.

The chief executive of Hyundai Motor America, John Krafcik, credits in part the "recessionlike environment" and Hyundai's lower prices for the strong performance. Consumers question the value of a "premium" vehicle that costs $5,000 more than a Hyundai. Hyundai's Accent, its lowest-priced model, sells for just under $10,000, while its top-end Genesis at $32, 500 is still less than a Lexus ES 350 ($34,700) or a Cadillac CTS ($36,560).

The public perception that a Hyundai is a "cheap" car has gradually been changing to a perception that the cars are good value. According to Hyundai's research, 30 percent of consumers now consider a Hyundai when shopping for a new car. This is nearly triple the number who did just five years ago.

Hyundai's aggressive and unique marketing has helped as well. They were the first to introduce an offer that lets customers who lose their jobs return their car with no penalty for up to a year. And they beat the competition by inviting customers to turn in old, inefficient vehicles under the cash-for-clunkers program three weeks before its official start.

Hyundai's future plans include a new Kia assembly plant in West Point, Ga., its first in the United States. (Hyundai has a plant in Alabama), and several new models, including the compact Kia Forte this fall and revamped versions of the Hyundai Sonata and Tucson next year.

The company’s goal is to have the industry’s highest fuel economy by 2015; it is currently third, behind Toyota and Honda, even with no hybrid in its lineup.