Hyundai Takes a 'Red Hot' Ride to the Top

Brand Ranks No. 1 in Customer Loyalty and Is Quickly Rising in Buyer Consideration

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DETROIT (AdAge.com) -- Hyundai surpassed both Toyota and Honda in February in Kelley Blue Book's ranking to become No. 1 in customer loyalty. Its redesigned midsize Sonata sedan, which went on sale in February, cracked its top 10 list for most-researched vehicles for the first time. And its redesigned Tucson was the most-considered vehicle among all 454 models on Edmunds.com last month, surging from No. 83 in December. Edmunds said no vehicle has ever moved up so quickly.

Hyundai Tuscon
Hyundai Tuscon
"To see a newcomer come in at No. 1 was a wild number for us to see," Edmunds analyst George Kang told Automotive News, referring to the spurt since December.

"Our dealers are seeing people we've never seen before," said Dave Zuchowski, Hyundai Motor America sales chief. "Our web traffic is off the charts -- higher than it was during cash for clunkers."

Mr. Zuchowski said dealers have only a 20-day supply of the Tucson, which was introduced in December. But production was bumped up in Korea this month to deliver an extra 20,000 units to the U.S.

"By the end of April, we will sell more Tucsons than we sold all of last year," he said. Hyundai sold 15,411 Tucsons in 2009. Through February, dealers delivered 4,957 -- up 113% from the first two months last year.

Climbing brand
Hyundai brand-division sales rose 8% last year in a market down 21% and are up 17% so far in 2010. Market share grew from 3% percent in 2008 to 4.2% last year.

Buyer consideration for Hyundai vehicles is soaring, according to Edmunds. Edmunds analyst Mr. Kang said about 4 million of Edmunds' 16 million to 17 million monthly visitors fall into the "consideration" category. Their traditional favorites have been the Toyota Camry and Honda Accord. He said Tucson snagged 3.2% of those viewers in February while the Camry was knocked out of the top 10. It is the first time a Hyundai nameplate topped its most-considered list; the Sonata was No. 4 in February, up from No. 33 in both December and January.

Hyundai's loyalty is up, too. Kelley Blue Book said Hyundai owners looking online at new models within the brand surged 10.4 percentage points to 56.3% in February .

Hyundai was No. 1 in that category. Toyota fell from first to third, down 4.4 percentage points to 53.3%. Honda remained in second place with a 55.8% number, up 0.7 percentage points.

"Hyundai is benefiting from a perfect storm," said James Bell, market analyst for Kelley Blue Book. "It's a result of introducing new products like the Sonata and Tucson, while Honda's mainstream vehicles, like the CR-V and Accord, are a bit stale, and Toyota is experiencing a huge consumer-perception crisis."

Hyundai dealers, meanwhile, aren't backing down from Toyota's aggressive incentives this month. Hyundai offers a $199, 36-month lease for the Sonata, a $239, 36-month lease for the Tucson and low long-term annual percentage rate loans.

"We know Toyota is being aggressive," said Bill Wallace, owner of Wallace Hyundai in Stuart, Fla. "But if you look at all the features, what you get for the money, we'll win. We're stacking up well against everybody. Hyundai is red hot. Bring 'em on."

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Kathy Jackson is a writer at Automotive News.

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