Hyundai's delay in expanding its SUV and crossover line-up continues to haunt the automaker.
Hyundai Motor continues to pay for its slow acceptance of the move away from sedans and into sport-utilities and crossovers by U.S. and Chinese consumers as it reported its third-quarter profits dropped 20%.
The South Korean automaker’s profits have fallen each quarter since 2013. Hyundai’s overall vehicle sales actually increased about 7% thanks to the popularity of its new products, Hyundai Kona and Genesis G70.
However, that wasn’t enough to counter the sales declines the company’s two biggest markets: the U.S. and China. In the U.S., the company is still lagging its competitors in the breadth of its utiliy vehicle offerings.
In China, sales have been hurt by non-automotive issues, primarily due to anger over a missile-defense system, according to the Associated Press.
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Hyundai unveiled its new Shopper Assurance program designed to eliminate the frustration of buying a new car from its dealers.
For the quarter just ended, Hyundai’s net profit was 852 billion won, or $758 million, down from 1.1 trillion won, or $978 billion, for the year-ago period. This drop came despite and overall sales increase of 10% and a 13% jump in operating income to 1.2 trillion, or $1 billion.
The results were in line with analysts’ expectations. During the first nine months of this year, Hyundai’s car sales declined 6% to 3.3 million units. Hyundai Motor’s retail sales in China slumped 29% in the first half of 2017.
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Hyundai hasn’t simply been throwing its hands up in the air over the shift to SUVs and crossovers in the U.S. and China. Hyundai introduced the Reina in China to tap into the trend. In the U.S., the company rolled out the Kona as well as a new buyer assurance program.
The new program is designed to increase transparency of car pricing and to make it easier and quicker to buy a new Hyundai through using the internet to spec out a vehicle, find it and schedule a test drive – which can be done at locations other than the dealership – cutting down shopping time for buyers.
(Hyundai gives buyers assurance with new car sales process. For the story, Click Here.)
Despite these efforts, the automaker expects that these problems will continue throughout the fourth quarter, in large measure because there no expected changes in the sales climates in China and the U.S.