The 2013 Hyundai Elantra: How Americans Fell in Love With This Small Stylish Car

Hyundai (NASDAQOTH: HYMTF  ) has mastered the art of pleasing its American clientele, and Elantra is an excellent case in point -- it was named the 'North American Car of the Year ' at the 2012 North American International Auto Show. Elantra, in its three avatars of sedan, coupe, and hatchback, is ruling the roost in the U.S. compact car market, taking on formidable rivals like Ford (NYSE: F  ) Focus and General Motors' (NYSE: GM  ) Chevrolet Cruze.

The 2013 Hyundai Elantra. Photo credit: Hyundai Motors.

Ever since the Elantra's 2011 makeover, its sales have shot up significantly, accounting for roughly a quarter of Hyundai's total North American sales last year. As the car nears the end of its four-to-five-year life cycle and the market gets excited over its relaunch in late 2015, here are the key takeaways for investors.

Solid position in the small car segment
In 2012, Americans bought nearly 14.5 million light vehicles , with small cars alone crossing the 2.8 million mark. As more people opt for fuel-efficient cars to tackle fuel price volatility, small cars are assuming greater importance in the U.S. auto market. Small cars typically include compacts, sub-compacts, city cars, sporty hatchbacks, tall hatchbacks, and compact crossovers .

With Hyundai selling more than 200,000 Elantras last year , the car has emerged as its top seller in the compact segment. The Elantra commanded nearly 7% of the American small car market last year.

Elantra's success story has continued into 2013, with torrid sales growth throughout the summer. Although volumes have normalized since then, monthly sales numbers have remained consistently higher than last year's levels. Hyundai will produce close to 400,000 units this year at its auto assembly plant in Montgomery, Ala., after turning out a record 361,000 units last year.

Source: GoodCarBadCar.net

It's interesting to see Elantra's sales growing even as gas prices fall -- an environment in which bigger cars are selling more. After peaking at $3.79 per gallon in February, gasoline prices fell to $3.27 per gallon by October.  And unlike the Elantra, sales of popular small cars like Focus and Cruze declined significantly in October. That divergence suggests that Elantra enjoys a competitive edge and a loyal customer base.

 Vehicle

Oct. 2013 Sales

Oct. 2012 Sales

% change

2013 YTD Sales

2012 YTD Sales

% change

Chevrolet Cruze

16,087

19121

-15.9%

211862

199721

6.1%

Ford Focus

15,108

18320

-17.5%

203762

205006

-0.6%

Hyundai Elantra

14,876

14512

2.5%

209469

167087

25.4%

Source: GoodCarBadCar.net 

The secret behind Elantra's popularity

In 2011, Hyundai's now-famous 'Fluidic Sculpture' design changed the game for Elantra, making the car look like it was in motion, even when it wasn't. The style attracted buyers in hordes, as reflected in Elantra's sales numbers over the years. And, two years since the makeover, Elantra still remains a style icon.

 Source: GoodCarBadCar.net 

Elantra's other trump card is its city mileage, which places it ahead of Cruze and Focus. What's more, the Elantra ranks higher than the Cruze and isn't not too far from the Focus in consumer ratings on the automotive website thecarconnection.com. 

  Vehicle

Rating

Mileage

MSRP

Chevrolet Cruze

7.8

22 MPG City / 42 MPG Hwy

$17,130

Ford Focus

8.8

23 MPG City / 38 MPG Hwy

$16,200

Hyundai Elantra (sedan)

8.4

28 MPG City / 38 MPG Hwy

$16,695

Source: thecarconnection.com 

More upsides

Industry sources are already talking about another major overhaul in Elantra's design. The redesigned car is likely to enter the market in the second half of 2015. The car's new look will be crafted by the renowned German designer, Peter Schreyer , who has recently joined Hyundai-Kia Motor Group as one of its presidents.

Schreyer is best known in the industry for his contribution in designing the original Audi TT during his tenure at Volkswagen and Audi. He now wants to work his magic on Hyundai cars. The new Elantra is likely to be leaner, powered by super-efficient turbo engines.

If the new design lives up to Elantra fans' expectations, there is every possibility that history will repeat itself, and Elantra sales will surge yet again. If this happens, Hyundai's foothold in the compact market will strengthen considerably, giving a huge push to its American prospects, which is critical for its overall success.

The U.S. ranks as the world's second-largest automotive market after China, and offers big opportunities as it moves toward pre-recessionary sales levels. Edmunds.com predicts sales of light vehicles in the U.S. to hit 16.4 million in 2014 . The U.S. is also Hyundai's most significant market, accounting for 16% of total sales in 2012. Last year, the company sold more cars in the U.S. than in its home market of Korea.

Source: 2012 Annual report and GoodCarBadCar.net;     sales are in thousands of units.

Final take

Elantra is among Hyundai's most important cars for the North American market, and its success is essential for the company's growth in the region. So far, Hyundai's strategies with Elantra have worked, and sales have risen at a good pace. If Elantra's 2015 makeover is as big a hit as its 2011 overhaul, there will be no looking back for the car or its maker.


Read/Post Comments (9) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 16, 2013, at 2:51 PM, Ethicaldom wrote:

    The writer obviously has never had to deal with or drive an Elantra.

    My Lady purchased one less than a year ago and it has been the WORST car she has ever owned and she is 50 years old and has owned many cars.

    The dealer has been impossible to work with an even though the transmission failed at 4,000 miles it was ruled that it was her fault! The tire side wall failed at 9,000 miles but Hyundai doesn't warranty the tires! Take it to the tire store, no warranty. Warning indicator came on, can't fix it.

    Tried taking it to another dealer, turns out both are owned by the same people. NO WARRANTY at anytime!

    Her biggest mistake was paying for the car in cash. The dealer doesn't care about her at all.

    The other point is that the car rides like a "lumber wagon" (my Jeep Grand Wagoneer) rides better. The handling is terrible and the so called fuel economy is nowhere near what they claim.

    She is attempting to sell it even though she will lose a lot of money. We both HATE this car!!!

  • Report this Comment On November 16, 2013, at 3:07 PM, jeremyskater wrote:

    I still have my 2006 Hyundai Elantra. It's a great car, reliable and maybe by 2020 I will be ready to trade it in. It's as reliable as my Corolla was, but more sporty.

  • Report this Comment On November 16, 2013, at 3:25 PM, Ethicaldom wrote:

    I can't say what the 2006 models are like as her's is a 2013. We have spoken to several other owners of recent models in the Space Coast area and all were very disappointed with the dealership and the cars.

    Less you think this is just a dealership issue, the whole story is that she originally purchased a 2012 Velocter. Paid cash. It was in the shop for 4 months out of the 6 months that she had it. After spending considerable money trying to get it fixed (massive electrical problems) the dealer admitted that they couldn't fix it, refused to give her a refund and would only give her credit toward the Elantra.

  • Report this Comment On November 16, 2013, at 7:25 PM, Vitabrits wrote:

    @Ethicaldom

    HUGE difference between a Veloster and an Elantra. Hell, Consumer Reports couldn't even recommend a Veloster. Elantra or Sonata only. Anything else is a waste of time from Hyundai.

  • Report this Comment On November 16, 2013, at 7:54 PM, Ethicaldom wrote:

    @Vitabrits, I am not familiar with the Veloster as that was before I knew her but her experiences with the Elantra and the dealerships I can verify.

    The point of this posting was what a good investment this company would be. I would NEVER invest in a company whose products are of such poor quality and whose customer service is non existent. The Elantra seems in my opinion to be all "style", claimed but unproved performance and advertising hype.

    Not a company I would put my money into.

  • Report this Comment On November 17, 2013, at 1:28 AM, stockerson wrote:

    Ethicaldom, something similar happened to me with my 2008 sonata but I bought it used and I was the third or fourth owner, so I never thought the yard long list of problems would have been there if i was the first owner. I think buying a Hyundai is like a big leap of faith either it will live for years and drive hundreds of thousands of miles without making a fuss or the opposite will happen.

  • Report this Comment On November 17, 2013, at 8:47 AM, bcweir wrote:

    Ethicaldom,

    Sorry to hear about your difficulties with Hyundai. Presumably the vehicle is still under warranty.

    Here's a strategy for you to try -- IF it works. Request a customer satisfaction survey from Hyundai. Hyundai should email it to you.

    When you get it, leave the survey BLANK, then take it to the dealer's service center. Show the survey along with the envelope it came in (will have Hyundai's letterhead on the envelope) to the service manager (don't bother wasting time with technicians, service advisors, front desk personnel).

    Let the service manager know that you intend to fill out the survey with ZEROES across the board and mail it back to Hyundai unless the issues are completely fixed to your satisfaction.

    Then stand back and watch the fireworks.

    If that doesn't work, get the dealership general manager in the room.

    Believe it or not, a negative customer satisfaction has serious implications for a dealership franchise, as the auto market is hugely competitive, even among dealerships among the same marque. Hyundai can withhold distribution of its most popular models from subpar dealership as a result of poor customer service surveys. This will hit the dealership directly in the pocketbook, as customers looking for a popular model will likely simply go to another dealership selling the model to get what they want.

  • Report this Comment On November 17, 2013, at 10:37 AM, Ethicaldom wrote:

    @bcweir, Thank you for the advice, we will give it a try. Actually she purchased an extended warranty with the Elantra, What a joke.

    The dealership is owned by a company that has at least one other one in the area and maybe more.

    What I find especially surprising is that you hear such different ratings about Hyundai and KIA, but they are the same company!

    Again, I would NEVER invest in either company.

  • Report this Comment On November 17, 2013, at 10:47 AM, Ethicaldom wrote:

    @Stockerson, Hmmm, third or fourth owner on a five year old car! Sounds like the future fate of my Ladies Elantra.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2731212, ~/Articles/ArticleHandler.aspx, 10/25/2014 2:45:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement