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October 7, 2009
Alabama-Made Santa Fe Doing Well In Bad Economy

By Dawn Kent -- The Birmingham News

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Hyundai has outpaced its peers recently in part due to increased advertising and incentive programs. (The Birmingham News / Joe Songer)

The Alabama-built Hyundai Santa Fe sport utility has been turning buyers' heads in recent months, bucking a widespread trend and posting strong U.S. sales results.

The SUV's sales last month jumped 50 percent over September 2008. That performance followed a similarly robust August, when sales rose 40.6 percent over the year-ago period.

The sales surge comes as many automakers are scaling back production, particularly for sport utilities. At Hyundai's Montgomery auto assembly plant, however, production of the Santa Fe is on the rise, climbing 19.4 percent from August to September.

Much of the Santa Fe's success can be attributed to the growing goodwill that consumers are showing Hyundai in general. The Korean automaker has responded to the global auto industry downturn by turning up the heat on high-profile advertising and incentives programs.

As a result, Hyundai has steadily outpaced its peers in monthly U.S. sales reports, and the Santa Fe is one of the "work horses" driving that trend, said Jessica Caldwell, an auto industry analyst for Edmunds.com.

"It's consistently selling fairly well," she said, adding that the Santa Fe's lower price point compared to other vehicles in its mid-size SUV class makes it an attractive choice for people looking to save money in a tight economy.

"With Hyundai, a lot of their advertising gets people shopping and looking, and when you do the price comparison and you need that size, (the Santa Fe) provides a good alternative to a Highlander or Pilot or even a Murano," Caldwell said.

The Santa Fe starts at $21,695, while pricing starts at $25,705 for the Toyota Highlander, $27,895 for the Honda Pilot and $27,680 for the Nissan Murano.

The Santa Fe also was named the best mid-size SUV last year by Consumer Reports, but peaking gas prices last summer hurt its sales, along with those of other SUVs, in the months following the announcement, said Robert Burns, a spokesman for Hyundai's Alabama plant.

"Now, gas prices have stabilized, and consumers look at this vehicle as a viable option because it has good gas mileage, and certainly being rated highly by Consumer Reports doesn't hurt either," he said.

The EPA-rated city/highway fuel economy for a Santa Fe with an automatic transmission is 18/24 mpg.

The Highlander won the Consumer Reports recognition this year, and the Alabama-made Pilot has won it previously.

In its U.S. sales report for September, Hyundai said it sold 7,010 Santa Fes, up 50 percent from a year ago. So far this year, Hyundai has sold 58,067 Santa Fes in the United States, leading last year's mark by 2½ percent.

The Santa Fe's popularity also is growing in Canada. Last month, Hyundai said it sold 2,478 Santa Fes there, a 70.3 percent spike from September 2008.

That growth means the Alabama plant -- Hyundai's only North American auto assembly plant -- has been busy shipping vehicles to Canada. So far this year, the plant has exported 17,481 Santa Fes to the country, already surpassing the 15,701 Santa Fes that were sent there during all of 2008.

Canada is an extremely price-sensitive market, Caldwell said, which could be one of the factors driving the Santa Fe's popularity there. The Hyundai brand in general also is enjoying a higher consideration from consumers than it did just four or five years ago, and that's playing a role in both U.S. and Canadian sales, Burns said.

"People are willing to give us a look, and obviously, they're not just people who are looking, they're buying," Burns said.


For more information, visit the Alabama Development Office Web Site:  http://www.ado.alabama.gov/