Hyundai’s Record April Aided by Chip Strategy, COO Munoz Says
(Bloomberg) -- Hyundai Motor Co. and Toyota Motor Co. kept ordering semiconductors last year even after the pandemic crushed auto sales. Both were rewarded with record April deliveries.
South Korea’s Hyundai sold 77,523 units last month, up 128% from a year ago. The Japanese auto giant’s U.S. sales grew 183% to 239,311 vehicles, including the Toyota and Lexus brands.
Automakers around the world idled plants a year ago as part of the broader shutdown to curb Covid 19. Many carmakers slashed orders for semiconductors to keep a lid on costs. Now, with auto demand roaring back and consumer-electronics companies gobbling up all the excess chipmaking capacity, they’ve been caught flat-footed.
Last week, Ford Motor Co. said it would have to cut production by half in the second quarter due to chip shortages.
“Most of our competitors decided to cut the orders,” Jose Munoz, Hyundai’s global chief operating officer, said in an interview. “We saw the market differently.”
Hyundai’s deliveries are up 48% for the year, led by the new Tucson compact sport utility vehicle and redesigned Elantra sedan.
The automaker hasn’t been completely unscathed by the shortage -- its Korean plants have lost about 45,579 units as of April 30, according to researcher AutoForecast Solutions.
But the company’s sole U.S. plant in Montgomery, Alabama, which makes the Sonata and Elantra sedans and the Santa Fe SUV, hasn’t had to halt production, the data show.
Toyota, which also touted its decision to keep plenty of chips on hand, likewise reported record U.S. sales in April. Most automakers reveal deliveries on a quarterly basis only.
Foreign brands may be especially keen to keep their U.S. plants running, said Joe McCabe president of AutoForecast.
“Foreign-based manufacturers competing in North America need to maintain their current foothold to keep customers as loyal as possible,” McCabe said. “If they don’t have the inventory to get it done, then they’re at a high risk of losing market share.”
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