Hyundai Sees 2007 U.S. Sales Up More Than 10%

Hyundai Motor expects to sell more than 500,000 vehicles in the United States this year, up from 455,520 units in 2006, a top executive at the South Korean automaker's U.S. arm said on

"In an environment of declining industry volumes, we expect to buck the trend, with over 500,000 units," Steve Wilhite, chief operating officer of Hyundai Motor America, told Reuters in an interview on the sidelines of the North American International Auto Show.

Wilhite, who joined Hyundai last August from Nissan Motor, said he expected total industry volumes to fall by 250,000 to 300,000 units this year.

Hyundai had targeted U.S. sales of more than 500,000 units in 2006, but was hit hard by supply constraints on the Accent and Elantra models due to labor strikes in South Korea. But the final tally in 2006 marked the eighth straight year of record sales, but with a rise of just 0.4%.

"We're well-positioned this year," Wilhite said, highlighting the upcoming roll-out of the Veracruz crossover in late March to early April. He said the model, to be unveiled at the auto show in Detroit on Monday, would compare "favorably" to Toyota's rival RX350 model.

Hyundai, the world's sixth-largest automaker, has come a long way from being known as a maker of low-quality economy cars, achieving some of the U.S. industry's top marks for initial vehicle quality in recent years.

That has helped Hyundai raise its vehicle prices in the United States, Wilhite said, noting that its average price discount against comparably equipped Toyota vehicles now stood at 6%, compared with 10% just one year ago. Wilhite said, however, that building and defining the brand remained an "enormous" challenge for Hyundai.

"We haven't done a good enough job for telling the story," he said. Far from being a cheap brand, he said, Hyundai had one of the industry's highest penetration of advanced safety features in its vehicles, such as electronic stability control systems.

Another urgent task Hyundai faced was improving its sales channel to make all 752 of its dealers better able to communicate Hyundai's brand and achieve a minimum annual sales level of 500 units, Wilhite said.

Beyond that, Wilhite said he was keen to introduce diesel-powered vehicles as a means to expand Hyundai's product and powertrain line-up in the U.S.. "The thing I'm most interested in, that I have the most conversations with (product development vice president) John Krafcik about is diesels," he said.

That was a much higher priority than adding a pickup truck to Hyundai's U.S. line-up, Wilhite said. He also backtracked on Krafcik's comments last year, made before Wilhite joined Hyundai, that the automaker was looking to build a "halo" car, meaning a high-profile car would strongly attract consumers to the brand and increase showroom traffic.

"A halo car has to be relevant to the rest of the brand," Wilhite said. "The people at Chrysler will probably say the Corvette is their halo car, but a Corvette driver would probably never say they drive a Chevy."