Hyundai Motors Co. is doing a little outsourcing of its own, with the automaker moving production of a compact sedan from South Korea to the United States. The redesigned Elantra begins production in Montgomery, Ala., later this year. While this decision won’t add that many new jobs, the move will require updates to the plant itself. Also, as the Sonata midsize sedan is made in Montgomery, Hyundai is now relocating production of the Santa Fe sport-utility vehicle to Point, Ga.
The Elantra location change comes at a time that auto sales have run out of gas – during summer months when, historically speaking, new car sales should be up. General Motors, Toyota (NYSE: TM), Honda (NYSE: HMC)and Ford (NYE: F) all reported monthly declines and from last year. Sales are in at 997,000, down 5% from July, according to AutoData Corp.
Analysts note that it has been the worst August for U.S. auto sales since 1983, when the U.S. was coming off of a double-dip recession.
It’s a sorry state of affairs automakers, after Detroit had hoped its bailout turnaround would warrant at least stronger results. And they have, albeit not as good as some hoped. Auto sales are stronger than last year, though still so weak that Ford just last week cut its fourth-quarter vehicle production plans by 4,000. Meanwhile, in China, sales in August increased some 56% over that same month last year, to 1.2 million vehicles.
Sales plunged 34% for Toyota in August, compared with last August and 12% from July. Honda’s
August sales fell 3%, and 7% at Nissan and Subaru, while 8% at Kia Motors. All of them reported bigger drops compared with August 2009 because of Clunkers sales. Ford sales dropped 5% from July and 11% from last August.
Those numbers, though, are getting just a hint better lately.
Hyundai has seen its market share bump up from 3% at the end of 2008 to 4.7% in August – doing so through smart marketing and a rollout of new products. After terrible summer months, Toyota has seen its stock go up +2% since late August, though in line with the Dow and S&P. Honda is up +7.8% and Ford up +6.7% for that same period.
Those recent gain, though, belie the summer slump that analysts expect to continue – at least in some respects. Most expect the economic recovery to be bumpy at best, and because of that used-car sales are on the up and up. Fewer 2008 and 2009 used-vehicle models are available than in peak sales years, which is also driving up prices.
Elantra sales in the most recent quarter were up some 21% over the same period in 2009. Sales of the newly updated model will begin in 2011.
As of this writing, Burke Speaker did not own a position in any of the stocks named here.
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