The 2013 Hyundai Elantra coupe, the SE version in this case, speaks forcefully and directly to an often-forgotten party at the bargaining table — the consumer.
Without wearing a union label, it makes an offer that is difficult to refuse. To wit: “I will give you a stylish, excellently crafted, fun-to-drive coupe that is easy to maintain and fuel. I will add one of the best new-car warranties in the business. I will give all of this to you in an ‘economy’ car that is better designed and better equipped than many more expensive rivals. And I will give it to you at a low base price that will make you blush: below $18,000”
Hyundai, which entered the United States in 1986, has been making that kind of deal since the early 1990s, when it decided it wanted to be a major player in the world’s largest automobile market. As a result, the South Korean car manufacturer has grown its U.S. market share nearly every year, reaching a 5.1 percent share last month, easily outdistancing perennially stumbling Asian rivals Mitsubishi (0.4 percent) and Suzuki (0.2 percent).
It is no longer unthinkable to conceive of Hyundai challenging the Chrysler Group, an Italian-owned, U.S.-based car manufacturer with an 8.9 percent U.S. market share.
I have been baffled by how Hyundai has been able to do this. The company isn’t selling cheap cars — poorly crafted machines whose only “value” is a low price.
As indicated by this week’s test vehicle, the 2013 Elantra SE coupe with front-wheel drive and standard six-speed manual transmission, Hyundai is turning out well-made, thoroughly enjoyable automobiles at quite reasonable prices. But how is that happening?
I’ve done some digging and come up with an initial answer. Hyundai’s labor costs are lower than its Asian, U.S. and European rivals both at Hyundai’s U.S. assembly plant in Montgomery, Ala., and at the final assembly point for the 2013 Elantra SE coupe in Ulsan, Korea.
The UAW, which has yet to organize a Hyundai operation in the United States, might see the company as a vulnerable target because of its wage differentials, which are nearly $12 an hour below that of rival car companies, according to some industry reports. But my on-the-ground reporting in Alabama indicates that Hyundai’s Montgomery plant is going to be a hard nut for the UAW to crack.
The people at Hyundai Motor Manufacturing in Montgomery make the company’s popular, mid-size Santa Fe sport-utility vehicles. They are aware that they aren’t paid as much as autoworkers in Detroit or at the Nissan facility in Smyrna, Tenn. But many of them say they are paid better than they’ve ever been paid by a company in Alabama. They have health care and other benefits. Hyundai contributes generously to local schools and social institutions. And, well, there’s this “pride thing.”
It doesn’t matter whether a Hyundai product is made in Alabama or Korea, some people in Montgomery say. It’s a Hyundai. It delivers on the company’s promise of giving maximum value at minimum cost. The 2013 Elantra coupe, essentially a two-door version of the award-winning Elantra sedan, proves that much.
The Elantra coupe might be assembled in Korea. But pride of authorship extends all the way to Alabama. How do you organize that?