SEOUL/DETROIT (Reuters) -- Strike action in South Korea has left automaker Hyundai Motor running out of cars to sell in the crucial U.S. market at a time when rivals such as Toyota Motor Corp. are clawing back lost market share.
The labor disputes, now resolved, at domestic plants that supply about half the cars Hyundai sells in the United States, threaten to upset the company's growth momentum, and have prompted some to wonder whether Hyundai made strategic mistakes with its measured expansion approach.
Hyundai was the only major carmaker to gain U.S. market share during the 2009 downturn, but it's now losing ground -- its market share slid to 4.8 percent last month from 5.5 percent a year ago and 5.4 percent in July.
Despite its best August ever for U.S. sales with 61,099 vehicles sold, the Korean automaker's U.S. sales rose only 4 percent during the month from a year ago. Hyundai lagged its rivals as the market had its best August since before the global financial crisis. Total U.S. August vehicle sales rose 20 percent from a year ago.
Hyundai stock has dropped 10 percent in 3 weeks, underperforming the benchmark KOSPI stock index, which is down 4 percent over that period.
"We've got all this momentum and if we give up some of that share now, it's going to be a lot harder to get back," said Adam Kraushaar, president of Lester Glenn Auto Group in Toms River, N.J., who sits on Hyundai's U.S. dealer council.
"We have an insanely low supply on the ground... The unfortunate thing is from the time they say they're going to invest in a new plant, we don't see those cars for 24 months or more. They've got to hurry up."
At just 21 days, Hyundai has the lowest U.S. vehicle inventories among major carmakers -- about half of Toyota's and a quarter of General Motors' -- Hyundai said, citing data from Automotive News.