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This is an interview done by a local Montgomery Alabama publication - Montgomery Advertiser. One of Hyundai's US manufacturing plants is located there so obviously expanding production there is a hot topic at the moment.

The road ahead for Hyundai

Dave Zuchowski had his work cut out for him when he took over as president and CEO of Hyundai Motor America a little more than a year ago.

The company was coming off a run of record U.S. sales and market share under former leader John Krafcik. Its global parent company had recently put the brakes on capacity expansions, which seemingly put sales growth on a leash, and a brutal winter storm was settling over the nation and stunting sales.

But Zuchowski's first year on the job turned out to be the biggest sales year in HMA history.

The company set eight all-time monthly records in Zuchowski's first 14 months, including surprising industry analysts with big gains this February.

He recently talked to the Advertiser about the company's run of success and the road ahead.

Last month, HMA outperformed sales expectations. Where does the company stand at the moment in terms of where you want it to be?

We are running ahead of our (sales) plan through the first two months of this year in an awfully competitive environment. We like that a lot. We're very happy that we're up for February. We have very aggressive plans for March, and we feel good about the way it's going. We've set five consecutive all-time sales records over the last five years, and our plan is to do that again this year. So far, so good.

What's the biggest concern on the horizon?

The one worry bead for us in terms of a very rosy economic picture in the U.S. is the mix of where the market is going. We are a car-centric company. We build about 80 percent cars, and the market runs about 50 percent trucks. Last year, the total industry was up about 6 percent. But within that, trucks were up over 10 percent and cars were up somewhere between 1 and 2 percent. So, most of the growth was going on the truck side, and it's just a little bit more challenging to try to grow your business on the car side when there isn't much growth there.

You've mentioned in the past that the company would like a bigger presence in the truck market. What types of vehicles does that include?

Generally, when you say "truck" people think of conventional pickup trucks. In reality, the huge growth in the market is happening in crossover vehicles — unibody construction vs. body-on-frame construction. They have great fuel economy and great style, and a lot of people who used to drive sedans are now driving a crossover. That's where the market's going.

How do you get a bigger slice of that?

We have the Santa Fe, the Santa Fe Sport and the Tucson that are great crossovers. There's very low inventory, so we need to get a greater share of the existing production and then figure out a way to secure (more) production. Economically, the U.S. market looks much more robust than other markets do around world. We think that will provide us with some opportunities to get a greater share of the global allocation of those vehicles. There's nowhere else where truck segments are a bigger piece of the market as here, so we have a very compelling message there.

So what's the plan moving forward?

We believe, short-term, we have to stay very competitive on our car business to protect our share there because it's very important to us. We have to figure out ways to get incrementally more trucks. And then, mid-term we need to figure out a way to get new segments. If you follow the Detroit Auto Show at all, we showed a concept vehicle based off a new Tucson. It's a hybrid between a crossover and a pickup truck. It's got a bed on it, but it's not a conventional pickup truck. We call it the Santa Cruz, and the response was phenomenal. That's a vehicle we like. We like a sub-compact, a B-segment crossover. Whereas many of the crossovers are based on mid-size platforms, you can get a crossover based on a sub-compact car. We're looking at that for future growth in the truck market.

Will you need the ability to build more vehicles than you can right now?

We haven't reached any commitments yet, but we understand to get this additional capacity it's going to take additional brick-and-mortar facilities at some point in time. (Hyundai Motor Manufacturing Alabama) is incredibly efficient. We built almost 400,000 vehicles last year. They're working three shifts. They're working overtime. So there's not much more volume we can get out of that plant. So we have to figure out a source for additional production. We believe the market's going to keep growing the way it has grown, particularly in the short-term with gas as low as it is. The natural demand for trucks is exacerbated because (consumers) don't care as much about fuel economy. We're dealing with that. We've got a good plan for it. So far, it has worked.

Do you see any kind of potential for growth in this area in terms of capacity?

We're looking at everything. Obviously, that's one of the considerations, for sure. We're just not prepared to make a decision on it yet. It's absolutely one of the considerations, of course, because it's been such a great work force and such a great relationship with Montgomery. We already have a very strong presence here.
This makes it very obvious that they want to go ahead with the SC. The problem is with all the hurdles to actually bring it to market in a reasonable amount of time.
It also sounds like this is just the beginning. They will probably start out with the SC, then expand their truck range to larger segments.
 

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Always wanted some more insight on what Hyundai's future plans for trucks are and finally we get it here, specifically with this part:

We have to figure out ways to get incrementally more trucks. And then, mid-term we need to figure out a way to get new segments. If you follow the Detroit Auto Show at all, we showed a concept vehicle based off a new Tucson. It's a hybrid between a crossover and a pickup truck. It's got a bed on it, but it's not a conventional pickup truck. We call it the Santa Cruz, and the response was phenomenal. That's a vehicle we like. We like a sub-compact, a B-segment crossover. Whereas many of the crossovers are based on mid-size platforms, you can get a crossover based on a sub-compact car. We're looking at that for future growth in the truck market.
Can't wait to see something upsegment from the SC on a production level, even the SC concept isn't even close to being a production level as some might have originally thought.
 

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Here's the thing, though: if they are NOT ready to bring this thing to market in a timely fashion, I believe they will lose. Why? Two reasons. First, the impetus that is there will have cooled off, by then. Second, competitors aren't stupid. If there truly is a demand for a vehicle like this (as most of us believe there IS), they can have a vehicle out in roughly the same time frame. (And, even if it's not ready for release at the same time, they can "announce" and "show" that vehicle before the SC is even released, causing people to wait and see.)

I'm excited by all that I've read this week, but at the same time, a little more disappointed that I won't see this vehicle for years.
 

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So it sounds like there are going to be more crossovers and trucks coming in the future which I can be happy about. I think that it makes sense to focus on smaller ones too. There seems to be more demand for that and it is probably easier to compete.
 

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Here's the thing, though: if they are NOT ready to bring this thing to market in a timely fashion, I believe they will lose. Why? Two reasons. First, the impetus that is there will have cooled off, by then. Second, competitors aren't stupid. If there truly is a demand for a vehicle like this (as most of us believe there IS), they can have a vehicle out in roughly the same time frame. (And, even if it's not ready for release at the same time, they can "announce" and "show" that vehicle before the SC is even released, causing people to wait and see.)

I'm excited by all that I've read this week, but at the same time, a little more disappointed that I won't see this vehicle for years.
Good point and out of all companies to see the potential in a specific truck market, Hyundai shouldn't be one of them, instead some long standing truck maker like GM, Ford, RAM. This is THEIR turf.
 

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Good point and out of all companies to see the potential in a specific truck market, Hyundai shouldn't be one of them, instead some long standing truck maker like GM, Ford, RAM. This is THEIR turf.
That's part of the reason why Hyundai wants to get involved though. They want to challenge the companies that have a hold on this segment. It's a long term investment and strategy.
 
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