Hyundai In A Struggling Economy
I’ve heard rumblings on the possibility of $5/gallon gasoline in the states. It seems outrageous, but a couple of years ago so did $3/gallon. Now economists are asking what’s the price-point where consumers will actually begin adjusting their behaviors. When $3 first hit, local news reporters from around the nation interviewed people at the pump, and a lot of them proclaimed they had had enough with rising gas prices and were going to cut back spending. I think that happened, but not on the scale that doom-and-gloomers expected.
Of course, there is a point where major behavioral changes will occur, and a significant number of people will spend less on whatever the can spend less on. So, how would Hyundai fare in an economy like that?
New car sales, in all likelihood, would take a hit as people choose to keep their vehicles longer, or look for a good used vehicle to replace their aging one. But new car sales obviously won’t hit zero. So of all the manufacturers, it seems that Hyundai is positioned well to be less affected than others.
This is for two reasons.
One, Hyundai has improved their vehicles significantly in the past decade. In Consumer Reports Top Picks of 2008, they name the Hyundai Elantra for small sedans, and the Hyundai Santa Fe for mid-size SUVs.
Two, Hyundai vehicles, while having the above quality, tend to cost less than their competitors. For those looking to purchase a new car a Hyundai may be more appealing than ever. They’ll get more “car”, while sacrificing less, and will benefit from the sticker price.
This isn’t a slam dunk for the auto-maker. If gasoline does reach as high as $5/gallon, expect the demand for hybrids to increase. And this may be Hyundai’s Achilles heal. If they’re able to release a few variations with hybrid engines, they could possibly achieve an economy-proof (er, resistant) trifecta.
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