Unless you are a Hyundai devotee, you may not have realized that the Korean make’s midsize model, the Sonata, is 25 years old. Introduced in 1985 in its home market, the Hyundai Sonata was exported to the U.S. a few years later and has changed remarkably over its six generation lifespan.

In June 2010, the Hyundai Sonata reached an important milestone: five million units sold.

That is quite an accomplishment for a car introduced to the market when the Ford Taurus reigned and the Toyota Camry, Honda Accord and models from Chevrolet, Pontiac, Oldsmobile, Chrysler, Plymouth and Dodge were the preferred midsize sedans of their time.

Old Times

I remember seeing my first Sonata some 20 years ago, purchased by friends who owned a diesel-powered Chevrolet Caprice, finally tiring of the aggravation they were experiencing with their American car. I wasn’t impressed by that Sonata, but by its fifth generation, the sedan was attractive, well appointed and a good value.

Good value is what has sold many a Hyundai model down through the years, a line of cars positioned to compete against Toyota, but offering more “stuff” and at a lower price. In recent years, high Toyota prices have turned off enough buyers to have them look elsewhere, with the newly released 2011 Hyundai Sonata giving them every reason to switch.

Big Time

The Hyundai Kia Automotive Group is now the fourth largest seller of cars in the world. Previous models to hit the five million units sold mark were its Accent and Elantra, entry level models designed for the masses. Hyundai says that Americans have snapped up 1.3 million Sonatas to date, the largest market for the sedan outside of Korea.

According to Hyundai,  the first-generation Sonata was based on the mid-sized car called Stella and came with a 2-liter engine. The second-generation Sonata in 1988 was the first Korean mid-sized to be fitted with a front wheel drive system. The third-generation Sonata was the first in its class to be fitted with airbags, while the fourth-generation Sonata in 1998 was mounted with the high performing Delta engine that was developed entirely with proprietary technologies.

The fifth-generation Sonata was rolled out in 2004 to target the international mid-sized vehicles market. This version delivered powerful performance through its unique, innovative Theta engine. With the segment-leading safety features and premium specifications, Hyundai sold over 1.5 million units globally.

Top Ten

Earlier this year, the 2011 Hyundai Sonata was launched, quickly becoming a Top Ten seller in the U.S. In May, 21,195 Sonatas were sold, the second consecutive month of top ten sales for the sedan.

Later this year, consumers will be able to shop for turbo and hybrid versions of the Sonata, a car that will soon be introduced to China and other markets.

Give it another five years and the Sonata will hit the 10 million units sold mark. That shouldn’t be hard given the car’s appeal, price and overall value.

Source: Hyundai Motor America

NOT Hyundai bound!

Nissan, Renault and Daimler are hooking up to build small cars while Fiat and Chrysler are now joined at the hip. Toyota owns Daihatsu and has stakes in Subaru, Suzuki and Isuzu, while Ford is preparing to sell Volvo to Geely. GM is dumping brands while several Chinese and Indian automakers are flexing their muscles.

This is 2010 and the auto industry is marching forward in its historic transformation, one where once bitter enemies are kissing and making up in a bid to save each other’s hide. Swing your partner and do-si-do…

Hyundai Kia

Hyundai is one of the few companies not needing a partnership although through its 38 percent ownership of Kia, already has one in place. But Kia doesn’t build big pickup trucks and the Hyundai Porter, a commercial truck not sold in the United States, cannot be refitted for noncommercial purposes. Yes, Hyundai wants to cover every vehicle segment with pickup trucks being its last major hurdle.

Rumors surfaced earlier this week that Hyundai was in talks with Chrysler about its Ram line of pickup trucks. Chrysler and Nissan recently decided not to move forward with their plans to base the next generation Nissan Titan on the Ram platform, leaving open the possibility that some other manufacturer might.

Cash strapped Chrysler and its poor boy Italian consort, Fiat, would most certainly entertain an overture for “licensing” its Ram line in the form of a Hyundai based pickup truck. Ford, GM (Chevy and GMC) and Dodge (Ram) still dominate the market with Toyota and Nissan coming in a distant fourth and fifth respectively. A Ram based Hyundai model would give the Korean brand quick access to the market with a respectable model.

Commercial Vehicles

PickupTrucks.com (who else?) has been following the story and reports that the Hyundai-Ram alliance is off. Instead, the Korean automaker is salivating at the prospects of developing a commercial vehicle for the US market and is keeping a watchful eye on Nissan whose NV line of CVs is expected to shake up the market. In that case look for Hyundai’s commercial line to show up first with its own full sized pickup truck following a few years later.

You didn’t think Hyundai would stay out of the lucrative truck market, did you? Not a chance. Hyundai is pushing further into the luxury segment, bringing its BMW 7-Series challenging Equus to America later this year.

2011 Hyundai Sonata Hybrid

Midsize sedan receives turbocharged and hybrid models.

This year’s New York International Auto Show will be remembered as a defining time for the Hyundai brand. At the NYIAS, Hyundai revealed two additions to its Sonata model line: a turbocharged four cylinder model and a lithium-ion hybrid. Those cars will go far in helping Hyundai achieve what few have dared to do: redefine what it means to be a midsize sedan.

Market Leaders

Beginning in the mid 1980s and lasting for about a decade, the Ford Taurus defined the midsize segment. Later, both the Toyota Camry and Honda Accord took over as market leaders although both the Ford Fusion and Chevrolet Malibu have offered a challenge in recent years.

The Sonata has been on the market for more than two decades but it hasn’t offered a serious challenge to the segment leaders. Though considered a value leader by some, until recently the Sonata’s styling has lagged the competition while also not being known for being particularly innovative.

New Sonata

That all changed when the 2011 Hyundai Sonata was released this past January. With this model we now have a sedan whose styling is bold and fresh, offering innovations not seen before at this level. Clearly, Hyundai is no longer satisfied with following the crowd—the Sonata may soon become the benchmark by which all other cars in its class are measured.

Yes, that is a bold statement to make, but please allow me to illustrate.

First, the styling of the latest Sonata is actually quite pleasing to the eye. Hyundai used what they call “fluidic design” to create a coupe-like look for its four-door. Moreover, the standard 2.4L I4 is the largest engine available for the Sonata, with Hyundai abandoning the V6. The lighter, more efficient Sonata is also the class leader in fuel economy, delivering 35 mpg highway. Yes, don’t forget that with a base price of $19,195, the Sonata is a price leader too.

Second, the absence of a V6 doesn’t mean that the Sonata is without power. At the NYIAS, Hyundai followed up its base model with what they call Sonata 2.0T, a direct injection turbocharged model with 274 horsepower and 269 lb.-ft. of torque. More power doesn’t mean lousy gas mileage either—Hyundai expects that the 2.0T will achieve 34 mpg on the highway—V6 power meets I4 fuel efficiency.

Third, Hyundai has been absent from the hybrid market, but that will soon change. When the Hyundai Sonata Hybrid goes on the market later this year, it will leap the Toyota Camry and Ford Fusion in efficiency and innovation, as its lithium-ion battery pack is 20 percent lighter than the nickel-cadmium units used by its competitors. Expect that the Sonata Hybrid will be priced lower than the others while offering fuel economy close to the combined 38 mpg enjoyed by the Ford.

Better Equipped

Of course, I would be remiss if I neglected to mention that the base Sonata comes better equipped than its competitors. Standard equipment includes a high power audio system, six disc CD changer with MP3 player and navigation unit are among the customer faves usually available as options on competitive models.

Yes, for about $20K you can get a nicely equipped Sonata that has the freshest styling, best in class fuel economy and an industry leading warranty. No wonder Hyundai sales are up and will continue to rise as the 2.0T and Sonata Hybrid enter the market.

Source: Hyundai Motor America

2011 Hyundai Sonata

Hyundai Motor America announced yesterday the pricing for its next generation Sonata, a midsize sedan incorporating numerous styling, engineering, and technological changes for the 2011 model year. The price for the base GLS has been set at $19,195, with the top of the line Limited priced from $25,295.

Hyundai introduced the Sonata in December at the 2009 Los Angeles Auto Show, immediately seeking to change the public’s perception of sedans in this segment. Besides offering improved exterior styling, the interior of the Sonata is larger, rivaling the cabin space found in some larger cars, while under the hood Hyundai has completely done away with the optional V6 engine, choosing to offer just a 2.4L I4 paired with a six-speed automatic transmission on most models. The standard GLS is paired with a six-speed manual transmission.

Class Leading Fuel Economy

Hyundai says that its engine will produce 200 horsepower while yielding 24 mpg city/35 mpg highway or 22/35 with the automatic. That 35 mpg number will allow the Hyundai Sonata to claim the highest fuel economy in this ultra-competitive segment, moving it ahead of the Ford Fusion (34 mpg) and the Chevrolet Malibu and Toyota Camry (33 mpg).

In announcing the Sonata’s pricing John Krafcik, Hyundai Motor America president and CEO remarked. “With the 2011 Sonata, our focus was a no-compromise engineering approach that would allow Sonata owners to have their cake, and eat it too. That focus led to a set of attributes that have not been seen in the midsize car category – attributes such as 35 mpg and 200 horsepower, bold design and an EPA Large Car interior, world-class quality and a class-leading value position.”

Well Appointed Midsize Sedan

The 2011 Sonata represents the sixth generation of Hyundai’s midsize sedan, a model that has been sold in North America since the 1980s. Built in Alabama, the Hyundai Sonata offers numerous standard features including an anti-brake system with traction control; electronic brakeforce distribution; front seat and side impact curtain airbags; Bluetooth connectivity; HD radio technology; and heated front and rear seats.

Offered in eight trim levels, higher end versions of the 2011 Hyundai Sonata include leather and wood touches; navigation package with rear back up camera; dual zone temperature control; power sliding and tilting sunroof; and a premium sound system.

Additional Package Offerings Planned

The 2011 Hyundai Sonata will begin to arrive in Hyundai dealerships this week for immediate sale. Hyundai is not done with the Sonata, promising to follow up with a turbo-charged I4 engine and the company’s first hybrid model in the near future.

Source: Hyundai Motor America

Hyundai says that Blue-Will serves as a test bed of new ideas that range from roof-mounted solar cells to drive-by-wire steering, lithium polymer batteries and touch-screen controls, and foreshadows future focused hybrid production vehicles from Hyundai. Blue-Will promises an electric-only driving distance of up to 40 miles on a single charge and a fuel economy rating of more than 100 miles per gallon.

Last week, I was asked by a long time friend what it is about Hyundai that changed my perception of the Korean automaker. He remembers back in the 1980s when I first visited a Hyundai showroom to preview the bland Excel, underwhelmed by what was on display and not liking the Hyundai brand whatsoever until, oh, the last few years.

I thought for a moment before I fired off several one line answers: Value. Design. Innovation. Warranty. Quality. Price. And of course the big one that I have been saying lately: unpredictable!

Yes, it used to be that Hyundai would build a car and that model would be exactly what you expected it to be: a lower cost version of the Honda Civic or Toyota Camry. Those earlier models, which have included the Elantra and Sonata, were not much to write about unless you were looking for cheap way to move from Point A to Point B.

New Hyundai Thinking

But Hyundai has gradually been improving each of its models, getting rid of old baggage like the Tiburon and bringing forth exciting new models like the Hyundai Genesis coupe. Personally, the Tiburon was the old Hyundai, while the Genesis coupe represents current Hyundai logic.

The Hyundai Blue-Will Plug-In Hybrid moves Hyundai into new territory. Yesterday it was bland, today it is innovative, but judging by what “blue will” is all about, tomorrow is unpredictable. And I say that in a good way.

Hyundai is late to the hybrid game, but when the automaker arrives, it will immediately challenge the leader which is widely recognized as Toyota thanks to the Prius. Blue-Will does for Hyundai what Evoq has done for Cadillac: a cutting edge design which can be incorporated in new products for many years to come.

The conventional gauge cluster has been replaced by an ultra-thin Transparent Organic Light Emitting Diode (LED) display mounted on the steering column that is adjustable for rake and distance. Thin-film TOLED technology allows information to be displayed in high resolution color.

Going Beyond Expectations

This won’t be any old hybrid either. A four passenger compact, Blue-Will offers a panoramic glass roof with solar cells, useful for recharging batteries. In addition, the car will incorporate a thermal generator which will convert hot exhaust gases into electricity.

Powered by a lithium polymer battery pack paired with a .6-liter Gamma 152-hp GDI engine the concept is said to get 106 mpg in plug-in mode or 50 to 55 mpg under normal driving condition. Not bad when you consider the federal government is pushing up fuel economy numbers.

Yes, the Blue-Will is but a concept, yet it offers strong hints at what Hyundai has in mind, particularly as the 2015 model year nears. By then, hybrid technology will be part of the Hyundai experience, offering enthusiasts several lines of fuel efficient, but stylish vehicles at a competitive price.

Source: Hyundai Motor America

Advertising Age recognizes Hyundai.

How do you spell success? A-z-e-r-a is one way to do that.

If you were to take a look at the typical Hyundai ad campaign over the years, what you would discover is that the Korean automaker has a liking for presenting fairly bland, straight forward messages to consumers. Unlike some advertisers who use every gimmick in the book to get people to sit up and take notice, Hyundai usually touts their offers simply if not effectively.

Super Ad

This past winter Hyundai decided to mix things up a bit by boldly going where no car manufacturer had gone before: offering an honest to goodness return policy with very few strings attached. Specifically, beginning with an ad that ran during the Super Bowl, Hyundai announced:

“Now finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit.”

That announcement reverberated through the industry as Hyundai threw the gauntlet down, which was soon picked up by consumers who decided to give the automaker a serious look. People who knew very little about the brand quickly discovered that the company offered a wide range of vehicles–nice looking ones at that–selling them for less than what their competitors were charging.

Moreover, if a buyer were to lose his job, Hyundai would step in and take the car back without wrecking his credit. Brilliant!

Advertising Age

Known as the Hyundai Assurance program, that marketing effort coupled with the company’s aggressive marketing of the Hyundai Genesis landed the automaker an exclusive award: Advertising Age’s Marketer of the Year, garnering 40% of the vote and beating out such heavy weights as WalMart, McDonalds, Lego and Amazon.

Hyundai’s timing was perfect as the Hyundai Assurance initiative was launched as the worst of the economic crisis was setting in. People were still buying cars (at greatly depressed levels), but quite suddenly value and a return policy became significant for shoppers. Why buy a Mercedes E-Class when a Hyundai Genesis sedan would do? What does the Toyota Avalon offer that can’t be found in a Hyundai Azera?

All that wasn’t lost on Advertising Age and its readers, marketing folks who knew that Hyundai’s market share had surged to 4.3% in the first ten months of 2009 from 3.1% over the same time period in 2008. What’s more, Hyundai continued to see its sales increase in September when mostly everyone else was losing customers post cash for clunkers program.

Conquest Sales

Those moves by Hyundai have spelled success as advertisers recognized that the automaker’s message to consumers is getting out and they’re responding. Importantly, Hyundai is managing to snag sales from Japanese and European car owners, many of whom would never had considered the brand previously.

Don’t expect Hyundai to rest on their laurels as the automaker smells blood and they want more…much more. With the big Hyundai Equus set to roll out next year and with fresh new models and technology coming down the pike, the Korean automakers is a force that will reshape the industry.

With quality levels on the rise, Hyundai offers perhaps the best blend of value, quality and customer assurance in the industry, just what today’s consumer expects. Talk about smart timing!

Photo Credit: Hyundai Motor America

The 2010 Hyundai ix35.

The 2010 Hyundai ix35 is all new, a compact sport/utility vehicle that will be introduced to the world next month at the 2009 Frankfurt Motor Show. But that isn’t stopping Hyundai Motors from teasing us with how the SUV will look, releasing a pair of sketches in advance of its roll out.

Finding Growth Among Compact SUVs

Replacing the Hyundai Tucson, the newly minted ix35 represents what the automaker says is a “bold step forward” in the evolution of the compact SUV.  This sort of update could propel the ix35 beyond the success of the Tucson which has been a proven seller in what is called the C-segment SUV range. That range is occupied by the likes of the Honda CR-V, Toyota RAV4 and Ford Escape.

“SUVs have been a cornerstone of our success for many years and have helped to raise awareness of the Hyundai brand in Europe,” says Allan Rushforth, Vice-President of Hyundai Motor Europe.  “With Tucson in particular we have demonstrated our expertise in producing SUVs which not only meet consumer expectations but also help to shape the sector itself.”

Bringing Nuvis To Life

Frankfurt is the logical place for the Hyundai ix35 to make its debut. Designed and engineered at Hyundai’s design and technical center in Frankfurt, the ix35 captures the “fluid styling” that has appeared in recent Hyundai concepts including the Nuvis.

The larger Hyundai Santa Fe will continue, receiving a mid-life makeover for 2010. A new SUV, dubbed the ix-55 will soon join the line up, replacing the Veracruz. Thus, it is safe to assume that when the next generation Santa Fe is released in the next few years that it’ll be renamed the ix45. It looks like Hyundai is switching to an alpha-numeric nomenclature for its SUV/crossover models.

World’s Fourth Largest Automaker

Hyundai’s global sales are surging, putting Hyundai-Kia ahead of the Ford Motor Company as the world’s fourth largest automaker. Indeed, in July 2009, both Hyundai and Kia saw its US sales increase thanks in part to the “cash for clunkers” program which began on July 24th.

Last week, Hyundai announced that the Hyundai Equus, its largest sedan would begin to be sold in the US by late 2010 as 2011 model. That sedan will compete against the likes of the BMW 7-Series, helping Hyundai expand deeper into the luxury car segment.

Source: Hyundai Motor Company

The 2010 Hyundai ix35.

For the first six months of 2009, Hyundai's market share increased as the Korean automaker achieved record profits. In the US, the Hyundai Genesis line including the pictured sedan have bolstered the company's image and helped fuel sales.

The Hyundai Motor Company is South Korea’s largest auto producer and is currently the eighth largest passenger vehicle manufacturer in the world. Include the Kia Motor Company in the mix (of which it holds a 38% share) and the combined Hyundai Kia Automotive Group is the world’s fifth largest car manufacturer behind Toyota, General Motors, Volkswagen and Ford.

Increase In Market Share, Record Profits

Yesterday, Hyundai reported sales (excluding Kia) for the first half of the year, saying that it sold 1,403,931 units, a 5.8% decrease from same period in 2008. However, Hyundai’s drop was much lower than the global average of fifteen percent, which means that the automaker gained market share. According to Hyundai, the company topped five percent of global sales for the first time ever, thanks to strong demand in China, the US and in Europe.

In addition to expanded sales Hyundai’s net profit was up 10.4%, another record, thanks mainly to the Chinese market where sales surged by 56%. Hyundai sells several models in China which are exclusive to that market.

First HEV Launched

Earlier this month, Hyundai launched its first hybrid electric vehicle (HEV), the Elantra LPI Hybrid, and is currently working on developing plug-in electric hybrid vehicles (PHEV) and fuel cell vehicles (FCV). An all new Sonata sedan and Tuscon SUV will be rolled out in the second half of the year, updates of two popular models.

Over the past several months, Hyundai has enjoyed plenty of positive publicity for a pair of new models released late last year and this spring. In January, the Hyundai Genesis sedan garnered the 2009 North American International Car of the Year award and other honors while the Hyundai Genesis coupe received recognition from the automotive press for its high build quality, sportiness, appearance, etc.

New Ultra Luxury Sedan

Hyundai is currently testing its Equus sedan, a luxury model currently on sale in its home market. The Equus is a fully loaded high end sedan that is expected to compete against the BMW 7-Series while carrying a sticker price of around $60,000. One hundred demonstration models are being shown to dealers and members of the press across the USA this summer. If well received, the Equus could be exported to the United States in the near future.

Source: Hyundai Motor Company

See Also — Hyundai Genesis Sedan (Full Review)

Inasmuch as luxury car buyers might turn their noses up when they hear the name Hyundai mentioned among BMW, Lexus and Mercedes, the fact remains that the Genesis holds its own against many of the top names in the business. And, with a price comparable to a Buick Lucerne or Toyota Avalon, the Hyundai Genesis is likely to attract customers looking to make their first luxury sedan purchase without busting the bank.

A Hyundai Surprise In The Form of the Genesis Sedan

Korean automaker brings high end luxury to the masses.

Say “Hyundai” and the image of an automotive brand producing the likes of the compact Elantra and the affordable Sonata comes to mind. But, in a bold and perhaps risky move, Hyundai has expanded its line to include a luxury model, one appropriately named Genesis.

Yes, this is a season of new beginnings for Hyundai (rhymes with Sunday) as the Korean automaker seeks to change the perception consumers have about its products while deciding against creating an all new luxury brand just as Toyota did with Lexus more than twenty years ago. With the Genesis, Hyundai has built a car that rivals the best German brands while pricing it closer to what people would pay for in a Buick Lucerne or a Toyota Avalon.

Taking Aim At German Luxury and Craftsmanship

The Genesis is actually two different cars, one a full sized sedan, the other a sport coupe. For this review I’ve covered the sedan, a vehicle Hyundai designed with Mercedes and BMW in mind. Indeed, the current Genesis has a strong resemblance to the Lexus GS, itself a European styled model just inches shorter than the Genesis but carrying a ten thousand dollar price premium over the similarly equipped Hyundai. That price differential is what Hyundai hopes will convince people to take a look at the Genesis when shopping for German or Japanese luxury.

Available in rear or all wheel drive, the two ton Genesis is powered by a base 3.8L V-6 engine or a 4.6L V-8. Both the rear wheel drive configuration and beefy V-8 engine are firsts for Hyundai, at least for the American market. Hyundai has been building larger cars for its home market of South Korea for many years; the Genesis represents the first of its kind for American export.

Should You Really Have A V-8?

My test model came equipped with the V-6 and not once did I feel that its 290 horsepower engine wasn’t enough to move the sedan. The V-8 produces 375 horsepower and runs on premium fuel; both engines are paired with a six-speed automatic transmission.

The center console mounted transmission shifted effortlessly responding to my demands to see how quick it could be brought up to highway speed. Handling is very good, not spectacular, but the cabin is quiet and the ride is very smooth.

For the record, the V-8 will get you from stop to 60 mph in just under six seconds while the V-6 motor is about a half second slower. You’ll choose the larger engine if matching Audi performance is important to you, but if you go with the V-6 you will get ample power, better fuel economy and be able to fill up with regular gasoline.

In a League of its Own

Inside, the Genesis is like no Hyundai before it. True, the Hyundai Azera Limited offered a first glimpse at what Hyundai could do by building a well optioned sedan, but the Genesis clearly is in another league.

Seating five passengers, the cavernous interior is well appointed and offers more leg and head room than any of its competitors. The front seats are very comfortable, with leather seating surfaces and heated seats standard while a cooling option is also available for the driver. Rear seats can neither be warmed nor cooled, but the support and legroom offered is quite good. Surprisingly, the rear seat doesn’t fold down, an attribute commonly found in similar sedans.

An electroluminescent instrument cluster is complemented by a well designed center stack, itself containing cabin comfort, navigation and audio controls, many of which are duplicated on the steering wheel or placed adjacently to the transmission shifter. Sound is out of this world as the Lexicon 7.1 Discrete audio system features an 11-channel, 528-watt digital amplifier and 17 speakers. The Rolls Royce Phantom is the only other car in the world to offer this amazing sound system, a point Hyundai notes when they market the Genesis.

Every Safety Feature Imaginable

In developing the Genesis, Hyundai made sure that all of the state-of-the-art safety features were included as standard equipment. Beyond dual front airbags, the sedan includes front and rear-seat mounted side-impact bags as well as roof-mounted curtain side-impact bags. Anti-lock brakes, electronic stability control, traction control, brake assist as well as specially reinforced front and rear crumple zones underscore the importance of safety.

Choose the premium or premium plus packages and you’ll also get a rear back up camera with front and rear parking assistance sensors, power rear sunshade and auto-leveling headlights among other features.

Trunk space is a full sixteen cubic feet, clearly at the higher end of its class. The opening is wide and the floor is flat; despite the rear seat not folding down, there is a pass through area for skis and similar lengthy objects.

Priced Like a Chrysler, Engineered Like a Mercedes

Despite concerns by some that the Genesis is a knocked down Lexus or Mercedes, those fears are quickly allayed as the sedan easily beats expectations. Base sticker price is in the low 30s and remains below $40,000 when fully optioned; slightly higher for the V-8. That price advantage will work towards convincing current owners of cars such as the Chrysler 300C and Pontiac G8 to consider the Genesis while giving BMW, Lexus, Mercedes, Infiniti, Cadillac and Audi drivers the message that the Genesis is a serious contender despite wearing the Hyundai name.

Photo Credit: Hyundai Motor America

Related Reading — First Drive: Hyundai Genesis Sedan

Examine US car sales for the past several months and that information reveals that Subaru, Hyundai and Kia have all performed quite well despite one of the worst economic downturns in our lifetime. Even as General Motors, Ford, Chrysler, Toyota, Honda and Nissan experience month over month losses of 35% or more, the three success stories are showing slight losses or in the case of Subaru even coming out ahead.

Hyundai, Kia Pull Ahead

But now we learn that a big reason for the increase in sales for the two members of the Hyundai Kia Automotive Group has much more to do with a sharp increase in fleet sales than just retail demand. According to Automotive News [subscription required], Hyundai and Kia have expanded their presence in the fleet market, replacing GM, Ford and Chrysler who have cut way back on this practice. Indeed, for the first quarter of 2009, fully one-third of Hyundai’s US vehicle sales were to car rental companies including National Car Rental, Hertz and Enterprise.

GM, Ford and Chrysler have long used fleet sales to help sustain market share, but that practice has had an adverse impact on resale values across the product line. For example, with a large number of 2007 and earlier Chevrolet Malibus in the fleet system, the resale price for these cars had long been held down even impacting customer perception of the 2008 and later Malibu. The newer Malibu underwent a major design overhaul for 2008 and is not part of GM’s rental car strategy at least to the extent of years past.

Big Three Rental Program Participation Down Sharply

The Big Three’s participation in rental programs decreased significantly in 2008 with GM down 90%, Chrysler off by 75% and Ford down by 65%. Hyundai and Kia have filled that vacuum with their own cars meaning your chances of renting either brand while visiting your favorite car rental company has now increased dramatically.

Though fleet sales help to increase market share, they also are among the least profitable sales for car companies. Ordered vehicles are typically sold at big discounts resulting in razor thin profit margins in exchange for increased profit share. Moreover, when these same vehicles are resold in the open market after one or two years, resale values drop thanks to a glut in inventory.

Lastly, customer perceptions about a brand are often formed when renting particular make/model with some poorly optioned fleet cars offering little reason for renters to consider the brand.

Also Read — Kia Soul’ster: Variation on a New Theme