- The Washington Times - Friday, December 6, 2002

Automakers, both foreign and domestic, chuckled over Hyundai's early efforts to crack the North American marketplace they are not laughing today. And they are not smirking over a recent prediction by Hyundai Motor America CEO Finbarr O'Neill setting a goal of 1 million sales of car and trucks annually by 2010.

It seems like an astonishing reach for an automaker whose annual sales were only 90,217 units as recently at 1998.

Mr. O'Neill, who is credited with the company's U.S. turnaround, said the goal, which would match the current size of Honda Division, is reachable.

"We can get there," he said. "If you look at the progress we've made on quality, if you look at the trends in various J.D. Power survey, you see that Hyundai is outperforming the industry in terms of improvement."

Sales have surged since 1998. The company has offered several new products, a 10-year, 100,000-mile powertrain warranty, rising quality scores and a record U.S. light-vehicle market.

Hyundai has added about 85,000 sales a year on average since 1998, and is expected to top 388,000 this year.

If it expects to hit the million mark by 2010, Hyundai must continue that torrid pace. If it does, it would be growth faster than either Honda or Toyota, the only other importers to reach that figure in vehicle sales annually in the United States.

American Honda Motor Co. Inc., entered the market in 1970 and took 28 years to reach 1 million sales. Toyota Motor Sales U.S.A. Inc. entered the market in 1960 and took 30 years to reach the same goal. Hyundai is hoping to accomplish the feat in 24 years.

Mr. O'Neill said for Hyundai to reach its objectives of 500,000 by 2005 and 1 million by 2010, "we will have to do a number of things right. No one will hand it us on a platter."

He said future growth will come from expanding into new segments, including an entry-level sport-utility vehicle for the 2004 model year, Mr. O'Neill expects growth to come from reaping higher volumes per model. Currently, Hyundai has only six models: five cars and a sport wagon.

"There's no reason we can't sell 200,000 or 300,000 Sonatas," he said and followed it up by saying: "Our products are getting better and better."

Hyundai's first U.S. manufacturing plant is scheduled to open in 2005 in Montgomery, Ala. It will give the company capacity to build 300,000 units a year for the U.S. market. Some of this capacity may go to corporate affiliate Kia as the two brands integrate platforms.

The plant will build Sonata sedans and Santa Fe sport wagons.

Some automotive analysts say they are skeptical about the company reaching the 1 million mark. Jeff Schuster, senior analyst at J.D. Power and Associates in Farmington Hills, Mich., said: "they basically would have to have their planets in alignment to hit that 1 million mark by 2010. They've already awakened the other brands. Their competitors will be looking to counter their future growth.''

It has been pointed out that most of the company's projected growth is expected to come from vehicles in the entry-level to $20,000 range the same segments targeted for growth by larger automakers such as Toyota, General Motors and Ford Motor Co.

The analysts also warn that the company is fighting on a narrow battleground that could slow its growth.

Mr. O'Neill, who declines to discuss future products, did say to reach its goals, Hyundai needs a "full selection of vehicles."

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