Toyota's Woes Open the Door Even Wider for Hyundai, AutoObserver Analysis Shows
By Michelle Krebs March 31, 2010Toyota's troubles, which have rubbed off on Honda in terms of sales, have opened the door even wider for up-and-coming Hyundai. 
An analysis by AutoObserver.com shows that three Hyundai models - the redesigned Hyundai Sonata, revamped Hyundai Tucson and still relatively new Hyundai Genesis sedan - have, in short order, have charged into the Top 10 of Most Shopped vehicles on Edmunds.com.
The first quarter of 2010 marked the first time ever that a Hyundai model captured the No. 1 spot on the Most Shopped list since Edmunds.com began tracking shopping consideration data in 2007.
And two Hyundai models scored that accomplishment multiple times during the quarter. The new Hyundai Sonata, just arriving in showrooms in volume, has been the No. 1 Most Shopped vehicle on Edmunds.com for two weeks running in March. The Hyundai Tucson was No. 1 for two weeks in the 2010 first quarter. The Hyundai Genesis eked into the Top 10, making Hyundai the only other automaker besides Honda to have three vehicles among the Top 10 Most Shopped.
It further appears that Hyundai is successfully converting shoppers into buyers. Edmunds.com analysts forecast Hyundai, which will report U.S. sales along with all other manufacturers on Thursday, will have its best monthly sales ever in March, aside from August 2009 when Cash for Clunkers was in full swing.
Edmunds.com predicts Hyundai will post March sales of 50,460 vehicles; Hyundai's sales have been running in the 28,000 to 34,000 range every month since September 2009. Only August 2009 was better than what March is expected to be. Hyundai, which capitalized on the government's Cash for Clunkers program, sold 60,467 vehicles last August.
Hyundai, combined with its sibling Kia, are predicted to have a March market share of 8.2 percent, the highest in history and above the previous high of 8.0 percent of August 2009.
Michelle Krebs, Edmunds.com senior analyst and editor at large, and AutoObserver Senior Editor Bill Visnic discuss these forecasted sales trends on a video on Edmunds' Inside Line.
Hyundai Models' Trajectory
Graph indicates model rankings on Edmunds.com's Most Shopped vehicle list
Source: Edmunds.com
Hyundai: Brand on the Run
Hyundai, which blasted through the recession of 2008-2009 by gaining sales and market share, continues to be a brand to watch in 2010. At every turn, the company introduces an impressive new model that immediately grabs public attention.
And this year, the Korean brand continues its new product assault with seven new or redesigned models introduced in 24 months. The new model intros started with the revamped 2010 Hyundai Tucson followed by redesigned 2011 Sonata. Next up is the 2011 Equus, followed by a new Elantra, Accent, a still-unnamed sporty coupe and Santa Fe.
Sonata: Biggest Launch Ever
Meantime, the just-launched Hyundai Sonata has held the No. 1 Most Shopped position for the past two weeks, in Edmunds.com's rankings. For comparison, in the weeks leading up to the Sonata going on sale in volume in March, the midsize sedan ranked in the range of the No. 30 to No. 40 among most considered models by shoppers. 
AutoObserver's analysis examined weekly consideration data, which looks at how consumers are shopping on Edmunds.com. Consideration data indicates the effectiveness of a marketing campaign and may suggest future sales. Edmunds.com tracks shopping consideration of more than 400 models.
Typically, either the Honda Accord or Honda Civic holds the No. 1 Most Shopped spot. The Accord has been No. 1 for 32 weeks and the Civic for 24 weeks since April 2008.
Indeed, Hyundai is marketing the heck out of the Sonata. Hyundai Motor America President CEO John Krafcik recently told reporters in Detroit that Hyundai is spending $160 million to advertise the Sonata, up from $120 million for the 2006 Hyundai Sonata and $80 million to launch the Hyundai Genesis. While it still pales in comparison to the $300 million General Motors reportedly spent to launch the Chevrolet Malibu, Krafcik noted the Sonata campaign is Hyundai's largest to date.
And its massive marketing appears to be paying off. Hyundai is converting Sonata lookers into buyers. Krafcik told AutoObserver in an interview that Hyundai was on track to sell 12,000 to 15,000 Sonata models in March.
That puts the Sonata closer to Honda Accord and Toyota Camry territory. Hyundai hasn't sold more than about 13,000 Sonatas in any month since January 2009. In recent months, as the brand wound down the old Sonata, sales slipped to below 11,000 units.
Meantime, Honda and Toyota generally have been selling between 15,000 and 30,000 Accords and Camrys, respectively, every month since January 2009, according to Edmunds.com's records. Toyota's quality and recalls woes prompted Camry sales to fall to the 15,000 territory in January and February.
Krafcik said Toyota's woes have helped the Sonata, which takes dead aim at the formidable Toyota Camry as well as the Honda Accord, Nissan Altima, Chevrolet Malibu and Ford Fusion. (Hyundai used the Fusion for its benchmark in developing the Sonata, Krafcik said.)
Hyundai research shows that that Hyundai Sonata buyers no longer have to explain or justify their Sonata purchase to their Camry-buying neighbors. In fact, neighbors ask their Camry-buying friends if they aren't worried about unintended acceleration, Krafcik said.
In addition, a key aspect of Hyundai's marketing - putting its vehicles into daily rental fleets - is paying off. Krafcik said the brand has a very high rate - one of the highest in the industry - of converting car renters to buyers.
But even before Toyota's woes and Hyundai's marketing efforts, the Sonata was garnering massive buzz on Edmunds.com's forums when it was unveiled at auto shows before hitting showrooms.
And this week, Hyundai unveils at the New York auto show a turbo version and a hybrid version of the Sonata. The Sonata hybrid will be Hyundai's first hybrid.
Tucson, Genesis No Slouches
Not to be ignored are two other Hyundai models. Before the Sonata took over the No. 1 Most Shopped spot, the revamped Hyundai Tucson grabbed that position for a couple weeks during the first quarter.
And the much-ballyhooed Hyundai Genesis sedan, named 2009 North American Car of the Year, made its way on the Top 10 Most Shopped list as well this quarter. In the week ending March 21, though it went on sale a year or so ago, the Hyundai Genesis sedan soared to No. 9 among Most Shopped vehicles on Edmunds.com; it had been ranked No. 50 or higher for the last few months. - Michelle Krebs, Senior Analyst and Editor at Large
Photos by Hyundai
1 - 2011 Hyundai Sonata
2 - 2010 Hyundai Tucson
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