Hyundai becomes the hunted

Tony Van Alphen

BUSINESS REPORTER

Managers at Hyundai Auto Canada know that this year will be different after the company posted one of the most spectacular performances in the Canadian industry's history in 2009.

"I told them to look at their backs because we're the targets now," said chief executive officer Steve Kelleher.

Hyundai, which had steadily posted strong sales increases in recent years, stunned the industry last year as its business shot up 28 per cent, or about 23,000 vehicles, to a record 103,233 at a time when the overall market tumbled 12.5 per cent.

The gain in 2009 easily beat Hyundai's own sales forecast of a sales increase of 10 to 15 per cent.

"We thought that was cautiously high," Kelleher said.

Last year's sales marked one of the biggest differences in annual performance between a significant automaker and the rest of the industry in the sector's history.

The results for Hyundai, which started selling cars in Canada in 1984, also moves it into sixth place among auto sellers and is fuelling talk about when the company will resume production at a Quebec assembly plant it shut in 1993.

Kelleher is projecting Hyundai's sales will jump another 12 per cent to about 115,000 this year. That would probably outpace the market again because most analysts are predicting a slow recovery and modest improvement.

But despite another bullish forecast, Kelleher is wary of rivals that will be paying more attention to Hyundai and be gunning for its customers in a fiercely competitive market. "Everybody is looking at us now," Kelleher said.

He said the misfortunes of General Motors Co. and Chrysler Group last year created an opportunity for Hyundai to win over edgy consumers with timely products.

Sales of the Elantra subcompact and Santa Fe crossover vehicle have boomed and consumer perceptions of the company's top quality gained more traction.

Kelleher said that in addition to continuing strong business for the Elantra and Sante Fe models, the company expects a boost in sales from the new Tucson crossover vehicle, Sonata intermediate car and a Sonata hybrid due in the fall.

The 2009 performance highlights a gradual turnaround for Hyundai, which stumbled badly in the late 1980s with consumer experiences of poor quality and unreliability. Hyundai insiders attribute the change to a shift in corporate culture that has focused on quality and cutting waste.

More videos from Wheels.ca and our partners