Hyundai Launches New Santa Fe SUV; Aims To Boost Domestic Sales
-- Hyundai Motor expects the new Santa Fe to help boost sluggish domestic sales.
-- Hyundai aims to sell 152,000 units of the new Santa Fe globally this year.
-- Hyundai Motor aims to sell 385,000 units of the sport-utility vehicle globally in 2013.
(Recasts the first paragraph; adds competition from imported vehicles in South Korea in the second and in fifth paragraph, more comments from Hyundai's marketing director in the third paragraph, more details on Kia in the sixth paragraph.)
By Kyong-Ae Choi
Of DOW JONES NEWSWIRES
Hyundai Motor Co. (005380.SE) launched the new Santa Fe sport-utility vehicle in South Korea Thursday as part of plans to shore up domestic sales, and said it will expand production of the company's flagship vehicle to overseas plants from July.
South Korea's largest auto maker by sales has been suffering from weak demand for its vehicles in its home market since last year because of increasing competition from foreign marques, and Hyundai hopes to achieve global sales of 152,000 units for the new Santa Fe, which is more fuel efficient and is the first completely redesigned model of the SUV in seven years.
"Given demand for the existing Santa Fe model has plunged, we expect a big improvement in domestic sales due to the launch of the all-new Santa Fe," Kim Sang-dae, director of Hyundai Motor's marketing division, said at a briefing.
From January to March, Hyundai Motor's domestic sales fell 7.1% from a year earlier to 154,855 units, while its overseas sales jumped 22% to 911,805 units, bringing total sales to 1,066,660 units. Hyundai aims to sell 4.29 million vehicles globally this year, up 5.7% from last year.
South Korea's auto makers face stronger competition from foreign companies, because free-trade agreements with the U.S. and Europe have resulted in lower prices for vehicles from these countries. In the three months ended March 31, sales in South Korea of BMW AG (>> Bayerische Motoren Werke AG) vehicles, which include the MINI and Rolls Royce brand names, were second only to Hyundai's sales, reflecting local consumers' growing appetite for German vehicles.
Hyundai said it will start production of the fully revamped Santa Fe SUV in the U.S. at Kia Motors Corp.'s (000270.SE) plant in Georgia from July, and start production at its No. 3 plant in China from October. Kim earlier said Hyundai will start producing the vehicle in Europe in June, but subsequently said the company currently has no plan to produce the car in Europe. Hyundai has a 34% stake in Kia, and the two companies form the world's fifth-largest car maker by sales.
It aims to sell 42,000 units of the vehicle in South Korea and 110,000 units in overseas markets in 2012. The company has set a higher sales target of 385,000 Santa Fe SUVs in 2013, including 335,000 units in overseas markets.
Hyundai has invested KRW430 billion ($377 million) in developing the new Santa Fe, which will be available with a 2.0-liter or 2.2-liter diesel engine in South Korea. In the U.S., the Santa Fe will have a 2.0-liter turbo gasoline direct injection engine or a 2.4-liter gasoline engine.
He didn't elaborate on the models that will be sold in Europe and China, but Kim said Audi AG's (NSU.XE) Q5 SUV will likely be the Santa Fe's main competitor in global markets.
The 2.0-liter diesel engine Santa Fe is tentatively priced at KRW28 million-KRW34 million in the domestic market, Hyundai said, adding finalized prices will be available next week.
Fuel efficiency for the 2.0 model is 17 kilometers per liter, a 13% improvement from the previous model, it said.
-By Kyong-Ae Choi, Dow Jones Newswires; 822-3700-1903; firstname.lastname@example.org