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The Hyundai-Kia Automotive Group has boosted its U.S. market share but it may run into trouble there in the long term due to its large proportion of fleet sales, a study says.
Fleet sales are bulk purchase by car rental firms, public agencies or other organizations. Many vehicles sold through fleet sales are dumped at used car markets at knock-down prices, lowering the brand value of the models.
That is why Japan’s Honda has made it a rule not to sell vehicles for fleets, while GM and Ford have relied overly on fleet sales.
U.S. magazine Automotive News quoted documents from Hyundai Motor America as saying that it sold 33.4 percent, or 32,000 of 95,854 vehicles during the first quarter, through fleet sales there. The total sales was similar to the corresponding period in 2008 (95,338), but fleet sales jumped from 2008, when it sold 25.4 percent or 24,200 cars that way.
If the ratio of fleet sales exceeds 20 percent, it could damage the brand value of car models, the magazine says, and fleet sales of more than 30 percent are dangerous.
Meanwhile, Kia Motors sold 34.9 percent of its total sales of 68,893 vehicles in the first quarter to fleets.
(englishnews@chosun.com )
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