US auto industry sales were stable at low levels but could improve slightly in the fourth quarter, Korean automaker Hyundai Motor Co's US chief executive, John Krafcik, said on June 22. "It is remarkable how stable the market has been between 9.5 and 10 million units this year," Krafcik said in an interview.
Krafcik, who spoke soon after Hyundai took the top spot for mass market brands in an influential survey on new car quality, said there is growing evidence of pent-up demand in the industry. "If you look at people who say they are going to buy in the next six months, that number is increasing month-over-month in a pretty big way," he added.
Krafcik also said the recently approved US scrappage program that will give consumers up to $4,500 to swap out of older and less fuel-efficient cars should give a boost to the market.
"We think that's going to get more and more people thinking about jumping into the market," he said. Automakers reported sales of nearly 10 million vehicles on an annualised basis in May, a better result than most economists had expected with the industry reeling from auto bankruptcies.
May represented the highest sales rate so for this year and industry executives have seized on that development as early evidence that the US auto market could be pulling out of its steepestt slump since the early 1970s The sales rate during the first quarter was 9.5 million units.
Krafcik said US auto industry sales could rise to exceed 10 million units in the fourth quarter. "As long as the economy has these green shoots and these little bits of sunshine, we do see some possibility for it to grow beyond the 10 million-unit level," he said.
Fear of job losses and volatile gasoline prices were currently holding consumers back from buying cars, Krafcik added. Hyundai's US sales are down more than 6 percent so far this year and the Korean automaker has a market share of 4.2 percent in the United States.
In wide-ranging remarks, Krafcik said that Hyundai's top quality ranking in J.D. Power's Initial Quality Study can be partly attributed to its design success. "Quality is 80 percent determined in the design phase," he said. "We do especially well on the design side."
Hyundai also got a boost from the launch of its Genesis sedan and improvements on Sonata, according to J.D. Power. This year marks the second time Hyundai has been the highest ranking non-premium nameplate in the last four years. The Korean automaker beat perennial quality leaders like Toyota and Honda to the top spot.
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