Everyone experiences growing pains at some point in their life. Some are more debilitating than others. As it enter its 21st year in the US, Hyundai is feeling a few of its own. In a market dominated by overproduction and a seemingly insurmountable glut of models, Hyundai has a good problem to resolve... maybe. A labor strike in Korea coupled with strong worldwide demand means U.S. dealers can't get enough of the popular Korean-built cars like the three-door Accent -- an issue that may also extend to the new Elantra and the forthcoming reskinned Tiburon.
Before you can build cars, you have to have engines, right? The first issue to work on is improving the currently limited capacity to build four-cylinder engines. The inventory of these engines, which power both the Elantra and Accent, is now and will continue to be a huge problem until something changes. As a result, Hyundai has informed dealers that the automaker is likely to miss its '06 sales target here in the US. Even at full capacity, the plants may fall short of meeting global demand next year as well, prompting concerns that the '07 sales target could be jeopardized, as well.
Undercapacity and overwhelming demand for your products is an enviable position to be in for a short time. Once the issue begins to affect long-term profitability, however, somebody had better deal with it quickly.
[Source: Kathy Jackson, Automotive News via AutoWeek]