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Hyundai Defies U.S. Slump as Asians Grab Record Share (Update2)
By Alan Ohnsman and Jeff Green

Feb. 4 (Bloomberg) -- Hyundai Motor Co. and Kia Motors Corp., South Korea’s largest carmakers, defied lower U.S. demand in January to help Asian brands grab record market share and outsell U.S.-based competitors.

Hyundai’s U.S. sales gained 14 percent after it began a program to let customers who lose jobs return cars. Toyota Motor Corp., the world’s biggest automaker, posted a 32 percent decline, Honda Motor Co. fell 28 percent and Nissan Motor Co. fell 30 percent.

“Toyota and Honda may be feeling some pressure from smaller brands, particularly Hyundai with its buyback program,” said Jesse Toprak, director of analysis for auto-research firm in Santa Monica, California. “Hyundai’s program seems to have really dealt with a core issue of making consumers feel more secure about a purchase.”

The gain for Seoul-based Hyundai was one of the few bright spots last month as auto sales withered amid mounting job losses and dwindling consumer confidence. Sales in the U.S., the world’s biggest auto market, dropped to the lowest unit total since December 1981, according to Autodata Corp.

Japanese and South Korean brands held a combined 49.5 percent share of the market last month, their highest ever, as U.S.-based competitors fell to a record low 42.5 percent, according to Woodcliff, New Jersey-based Autodata. Asian brands first overtook U.S. automakers in market share in June 2008.

The Korean companies have also been aided by the won, the worst performing Asian currency this year. The won has dropped 31 percent against the dollar in the last 12 months, compared with the yen’s 19 percent gain against the U.S. currency.

Industrywide deliveries tumbled 37 percent to 656,976 as the recession ravaged demand. That translates into an annual rate of 9.6 million after an average of more than 16 million vehicles in this decade.

General Motors Corp. had a 49 percent decline, Ford Motor Co.’s sales fell 40 percent and Chrysler LLC’s plunged 55 percent.

Toyota, which grabbed the global sales title from GM in 2008, sold 117,287 vehicles last month, down from 171,849 a year ago. Excluding the Toyota City, Japan-based company’s new Venza wagon, sales fell for every Toyota, Lexus and Scion model in January.

“There’s belt-tightening happening at every aspect of our business,” Bob Carter, U.S. vice president of Toyota brand sales, said in a conference call yesterday.

Even with its 32 percent sales decline, Toyota’s market share was 17.9 percent, up from 16.5 percent a year earlier.

Honda sold 71,031 vehicles, down from 98,511. Among its models, only the redesigned Fit hatchback and new Acura TSX posted gains from a year earlier.

Market share for Tokyo-based Honda was 10.8 percent, up from 9.4 percent in January 2008.

Nissan’s sales fell to 53,884 from 76,605 a year earlier. Still, the Tokyo-based company’s market share rose 0.9 point to 8.2 percent.

Toyota rose 4.5 percent to 3,010 yen, at the close of trading in Tokyo. Honda gained 6.3 percent to 2,190 yen in Tokyo, and Nissan rose 7.5 percent, to 288 yen.

Hyundai’s sales increase to 24,512 units came after it announced a company-sponsored “assurance” policy last month that the company said protects customers’ investment in new cars and trucks against loss of job or income for a year.

“We definitely got some good momentum from the assurance program,” Dave Zuchowski, Hyundai’s vice president of U.S. sales, said in an interview yesterday. “Based on what we’ve heard from dealers, there’s no doubt the program generated business.”

Hyundai, which advertised the buyback program during the Super Bowl on Feb. 1, also gained from the surprise victory of its new Genesis luxury sedan as North American Car of the Year in mid-January. Genesis was the first of Hyundai to win such acclaim, decided by a vote of automotive journalists.

Hyundai’s market share rose to 3.7 percent last month, up 1.6 points, according to Autodata.

In Seoul, Hyundai gained 8 percent to 51,900 won at the end of trading on the Korea Stock Exchange.

Kia said it sold 22,096 cars and light trucks last month, up from 21,355 a year ago.

Kia rose 780 won, or 9.7 percent, to 8,790 won in Korea Stock Exchange trading today.

Subaru, the automotive unit of Tokyo-based Fuji Heavy Industries Ltd., joined Hyundai and Kia in bucking the market’s overall declining, reporting an 8 percent increase in sales of its sedans, wagons and sport-utility vehicles. Toyota owns 16.5 percent of Fuji Heavy.

Mazda Motor Corp., a Ford affiliate, reported a 27 percent drop in its sales to 15,420.

Among smaller Japanese brands, Mitsubishi Motors Corp. sold 4,730 vehicles, down 35 percent, and sales for Suzuki Motor Corp.’s U.S. unit dropped 49 percent to 3,655.

January had 26 selling days, 1 more than a year earlier. Some automakers release results adjusted for sales days, meaning the totals will be about 4 percent lower than unadjusted numbers. Bloomberg uses unadjusted figures.

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