Krafcik: 3rd shift will boost Elantra, Sonata output
LOS ANGELES -- Hyundai's U.S. chief favors boosting output of the Elantra compact when a third shift begins at its Alabama assembly plant in September.
The additional shift will boost the plant's production by 20,000 units between September and year end. Most of the additional production capacity will likely be used to make more Elantras if tight inventories and high demand for the car persist, said John Krafcik, CEO of Hyundai Motor America.
Hyundai has not set the production mix for the new shift. At the plant, in Montgomery, Ala., about two Sonata sedans are now assembled for every Elantra.
"I think it's safe to say with 20,000 units, we would build more than half of those as Elantras," Krafcik said.
In 2011, 338,127 vehicles were assembled at the plant, 85 percent of them for U.S. sales. Vehicles for sale in Guam, Puerto Rico and Canada also are built there. The third shift will boost output this year to 345,000 units and "significantly more" in 2013, though Krafcik declined to specify next year's production capacity.
Tight supplies hobbled U.S. Elantra sales last month; sales fell 24 percent from April 2011 to 16,836 units. Hyundai began April with about 4,400 Elantras in inventory, 30 percent fewer than last year, Krafcik said.
"We're really going hand to mouth right now on Elantra," he said.
Sonata sales dipped 6 percent to 20,521 vehicles after starting April with inventories down 13 percent from last year, Krafcik said.
The sluggish results held Hyundai to a 1 percent increase in sales last month, its smallest increase since August 2010. Hyundai still sold 62,264 vehicles last month, its second-highest monthly total on record.
Dealers' "stocking level is low despite our best efforts to increase production and keep up with demand," Krafcik said. "We just honestly haven't been able to keep up."
The vehicles, both in the third model year of their current generation, are by far Hyundai's best-selling nameplates, together accounting for 136,953 units, or 61 percent of Hyundai's total sales through April.
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