Even record Hyundai production cannot meet soaring demand

Source: Montgomeryadvertiser.com

Workers at Montgomery's Hyundai plant set one production record after another in the first half of this year, but because of skyrocketing sales it still hasn't been enough to keep up with demand.

June's production included 19,681 Sonatas and 11,819 Santa Fes. The plant produced 5,306 vehicles for export and 26,194 for sale in the United States.

In the same time frame, U.S. consumers scooped up 133,625 Montgomery-made vehicles. That means, despite all the six-day weeks and all the overtime for employees, Hyundai has 4,138 fewer Montgomery-made vehicles in its U.S. inventory than it did on Jan. 1.

Somewhat surprisingly, that isn't directly because of soaring sales of the 2011 Sonata. The plant made 4,897 more Sonatas than Hyundai sold in the first half of the year.

Hyundai was able to produce extra Sonatas only because it cut back on production of the Santa Fe for several months. In June, the plant ramped up production of the Santa Fe because inventory was dropping dangerously low.

"That is certainly part of the equation," plant spokesman Robert Burns said. "We had to replenish that inventory because we had been so focused on the Sonata."

Santa Fe sales have been fairly steady, leading to a significant inventory reduction. The plant made 35,341 of the small SUVs for U.S. sales in the first half of the year, but dealers sold 44,376 models.

That difference wiped out more than 9,000 units of inventory of the Santa Fe.

That Hyundai's inventory of Montgomery-made vehicles fell in the first six months is significant not only because it came during a time of record production. It also is significant because it came at a time when Hyundai started with a reduced inventory.

The company does not announce its inventory levels, but Hyundai sold 38,329 more Montgomery-made vehicles in 2009 than it produced. That was largely because of the reduced production levels for the first six months of last year, but it meant the company started 2010 without excess inventory.

A strong demand from Canadian buyers for the Santa Fe also contributed to increased production of that model. Hyundai shipped 3,925 Santa Fe vehicles to Canada in June.

June's production was more than double year-earlier levels. In June 2009, the plant made 14,904 vehicles in what was the final month of a reduced production schedule.

Through the first six months of this year, the plant has produced almost as many Sonatas as it did during all of last year. By June, the plant had produced 102,164 Sonatas, compared to 103,876 last year.

The plant will operate 10-hour shifts in July, Burns said. Production is planned for two Saturdays -- July 17 and 24 -- this month.

That will give the plant 17 production days in July, and Burns said it will continue to produce about 1,250 vehicles daily. The plant averaged 1,260 vehicles daily in June.

Hyundai did not announce a production mix for July.

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