Hyundai Sonata production in Alabama

Hyundai
's U.S. dealers are finding popularity to be bittersweet. While sales are at record highs, supplies are tight. Labor strikes at the company's South Korean plants have cut as many as 10,000 U.S.-bound vehicles.

Though union workers reached an agreement with Hyundai last week, the new contract cuts the two 10-hour work shifts to an eight-hour day shift and a nine-hour night shift. That's about a 15 percent reduction in production hours beginning in March. Union officials say productivity will improve and that no loss of output is expected.

Hyundai's largest South Korean plant currently builds 300 cars an hour, totaling 1.5 million cars a year. Automotive News estimates that a 15-percent reduction at that plant alone would be a loss of 234,000 units a year.

To make sure U.S. demand is fully met, Hyundai's Alabama plant has added a third shift that is expected to churn out an extra 20,000 Sonata and Elantra models by the year's end.

"Hyundai has been running flat out," Automotive News quotes Chris Richter, an auto analyst at CLSA Asia-Pacific in Tokyo. "They don't have spare capacity lying around. It's going to put pressure on them to start adding capacity somewhere. Their investors and dealers are going to be screaming for more product."