Hyundai Motor Co. hoped fresh styling would help the Elantra keep its plum spot behind the Honda Civic and Toyota Corolla in the U.S. compact-car market.
Instead, after the January redesign, sales collapsed.
Through the first four months of 2016, Hyundai sold just 51,724 of its No. 2-selling U.S. model, a 34 percent decline from a year earlier that caused the Elantra to slip into fifth in its segment, behind the Nissan Sentra and Ford Focus, and narrowly ahead of the Chevrolet Cruze. Meanwhile, sales of the redesigned Civic soared 29 percent from a year earlier to 122,634.
Blaming the sales slowdown on the disappearance of the discounted 2016 Elantra from showrooms, Hyundai has dialed up incentives on the redesigned 2017 Elantra to ease the sticker shock. May offers include a 36-month lease with $1,999 due at signing and a $169 monthly payment -- $10 per month less than Honda asks for the Civic.
"This is not at all unusual during launch phases," spokesman Jim Trainor wrote in an email. "We are adjusting incentives accordingly ... to restore our historical positioning in this fiercely competitive segment."
The sales slowdown is unusual for such a newly redesigned model, and partly reflects the shrinking of the compact-car segment, whose customers have been migrating to crossovers such as the Hyundai Tucson. Yet it also reflects Hyundai's corporate strategy of cutting incentives during a model changeover and moving high-priced cars, such as the top-of-the-line Limited trim, to the front of the production queue.
Hyundai has spent less on incentives in April to sell the Elantra than Nissan spends on a Sentra, though the Elantra doesn't seem to suffer from oversupply, said Patrick Min, an analyst at the car-shopping service TrueCar. On average, he said, the 2017 Elantra is leaving dealer lots more quickly than the Civic.
It is possible, Min said, that "dealers just don't have enough cars yet."
Hyundai plans to help Elantra sales later in 2016 with more engine choices. The more efficient Elantra Eco, powered by a new 1.4-liter turbocharged four-cylinder gasoline engine, arrives in showrooms this week, while the Elantra Sport, powered by a 1.6-liter turbo cranking out around 200 hp, arrives at the end of 2016.