VW and Hyundai Big Losers in November Car Sales

U.S. car and light vehicle sales grew 8.9% to 1,245,325 in November. Most of the largest companies reported record sales. Two large global manufacturers were left well behind — Volkswagen and Hyundai. Each needs to do well in the American market, the world’s second largest, to fulfill aspirations to be worldwide industry leaders. For now, that is out of the question.

VW management has stated that it plans to be competitive with Toyota Motor Corp. (NYSE: TM) and General Motors Co. (NYSE: GM), which go back and forth as the world’s number one in the global unit sales year after year. VW’s vehicles have been rejected by U.S. buyers. Sales of its cars dropped 16.3% to 30,727 in November and are down 5.2% to 373,689 for the first 11 months. Even VW’s 0% APR financing for 60 months has not helped move cars. VW ranks near the bottom of the 2013 J.D. Power and Associates 2013 U.S. Vehicle Dependability Study. Its odd mix of small sedans, led by the Passat and Jetta, has failed to draw customers despite low prices. VW still sells the ancient Beetle, although consumers do not seem to be interested in a car that is decades old.

Hyundai and stablemate Kia were among the hottest selling cars in America for several years. Then came the scandal that involved overinflated claims for miles per gallon on many of its models. The news about the issue made it to nearly every media outlet. The negative publicity may take years to fade away. Hyundai and Kia also rank well below average in the J.D. Power study. No wonder Kia sales are off 3.3% to 501,548 in the first 11 months of 2013. Hyundai barely scratched out an advance for the same period — up 2.2% to 657,778. Hyundai’s modest line of sedans, compacts and crossovers have been overwhelmed by the Big Three and Japan’s big manufacturers. (Editor’s note: Hyundai November sales rose 4.7% to 56,005. Total U.S. car and light vehicle sales were up 8.9% for the month.)

The largest problem about falling behind in the U.S. market is that so many manufacturers are doing so well. VW and Hyundai are chasing competitors that are running much faster than they are.