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Hyundai Issues Help from Kia to Satisfy Growing Demand for Crossovers

Motor Trend logo Motor Trend 10/21/2014 Kelly Pleskot

Because of its record growth in North America, Hyundai has long struggled to keep up with production for its vehicles. Demand for the Elantra and Sonata quickly outstripped capacity in the U.S. a few years ago, and it looks like Hyundai is also having this same problem with its crossovers. According to a new report, Hyundai is eyeing a new assembly plant to help build additional crossovers, but until then, it will likely borrow capacity from Kia's facilities in North America.

Hyundai's U.S. boss Dave Zuchowski told Automotive News that Hyundai will probably gain production from Kia's Monterrey, Mexico plant, which opens in 2016. This plant will allow Kia to produce 300,000 more vehicles a year, including compacts, subcompacts, and crossovers.

2014 Hyundai Santa Fe Sport© Provided by MotorTrend 2014 Hyundai Santa Fe Sport

At the same time, Hyundai is likely to get additional capacity from Kia's plant in West Point, Ga. Currently, the plant is running at full capacity thanks to strong demand for the Kia Optima, Kia Sorento, and Hyundai Santa Fe.

Crossovers are a particular hot spot for Hyundai right now. Not only do they provide the highest margins for dealers, but they have also been selling well as of late. Hyundai's overall U.S. sales are only up 2 percent so far this year, but its crossover sales have increased a whopping 21 percent. As of October 1, Hyundai only had a 44-day supply of its crossovers, and at one point during the year, supply was as low as 37 days.

Source: Automotive News (Subscription required)

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