This is a private community!

Please register to see all of our content...

Register Log in

Hyundai Motor overwhelmed by soaring Palisade orders

Palisade Forum

Staff member
Messages
174
Reaction score
105
Points
43
By Nam Hyun-woo

Hyundai Motor is in dilemma over the popularity of its Palisade full-size SUV and Nexo hydrogen car on the domestic market, as this may not lead to actual sales, industry analysts said Wednesday.

A growing number of consumers are complaining of having to wait up to 10 months before receiving their Palisade, while the government subsidy for the Nexo is running out due to higher-than-expected demand.

The analysts said Hyundai Motor's excessively "conservative" demand expectation has led to it failing to supply enough cars, raising worries that the company may lose a good opportunity to recover from its earnings slowdown.

According to industry officials, Hyundai Motor has received more than 52,000 orders for the Palisade since the SUV's launch in December. This is more than double the company's initial expectation of 25,000.

This has created an unprecedented waiting list for customers. A Seoul-based Hyundai Motor dealer said it takes at least seven months for delivery if the customer orders one now, and up to 10 months if they want a unique color option or the deluxe model.

"For customers, it may not be acceptable to wait for 10 months for a common car, whose best appeal is cost efficiency," an industry official said. "Ten months is what people normally expect for a luxury car. The company may lose a good opportunity because of its failure to expect the demand."

Hyundai Motor also said it did not expect this explosive response, adding it had to be conservative in predicting the car's demand given the size of the segment in the domestic market.

"Last year, 54,000 full-size SUVs were sold in the domestic market," a Hyundai Motor official said. "We calculated the 25,000-vehicle demand based on the data on the existing market size. And even the number was seen as a bold goal back then."

As the company set the target conservatively, its current capacity to assemble the Palisade also remains at that level. Hyundai Motor said it is trying its best to expand capacity, but this will also take time.

According to the company and its suppliers, it has two ways to increase the number of available Palisades.

One is setting up additional facilities, which are only available during the company's summer holidays, and the other is increasing the number of units produced per hour.

Hyundai Motor is manufacturing the Palisade in its Ulsan No. 4 plant, where it also produces the Starex commercial van and the Porter mini truck.

By cutting the output of the two other vehicles, it could increase the number of Palisades, but it also requires consent from the union because it involves relocating jobs.

However, the union, which has opposed many of the management's other plans, is positive on increasing output and is in negotiations with the management.

"The union is positive on the expansion of the Palisade output, and we expect the talks are going to be smooth." a union official said.

Another problem in increasing the number of Palisades is the time required by auto parts companies.

"Since auto parts companies prepare parts depending on manufacturers' orders, suppliers are also not able to respond to the increased demand that promptly," an auto parts company official said.

This is leading to a tire shortage for the deluxe version. For this, Hyundai uses 20-inch Michelin tires as original equipment, but it recently decided to also use Bridgestone 20-inch tires because of the shortage.
 
Looking to cover or replace the KIA emblems on your Palisade? Look no further than right here in our own forum store - where orders are shipped immediately!

3sons66

Member
Messages
32
Reaction score
8
Points
8
This is a problem that companies want to be in. I'm sure Hyundai executives are very happy. Delearships are marking their Palisades above MSRP. This makes the consumers unhappy.
Dealers should be careful...the honeymoon only lasts so long. They risk future return customers and really that's what it's all about. Is it worth losing a lifetime customer over a couple of thousand dollars?? I paid $1000 under MSRP, plus got the $500 1st responder. My 4th vehicle through his dealership. This time next year, dealers will be overwhelmed with excess inventory.
 

Pfb483

New member
Messages
11
Reaction score
3
Points
3
Just purchased my Ultimate last night (Canadian dealer). Through negotiations as well as first responder discount, was able to get $1700 off MSRP as well as mats, cargo tray, mud flaps and locking wheel nuts dealt in. Dealer advised delivery would be 4-8 weeks based on previously delivered orders. They also had a few on the lot that they had sold from inventory, though keeping at least two back for demos and test drives. I’m hoping the timeline they gave me is still reasonably accurate, but based on this I won’t count on it. Thanks for the info. Time will tell.
 

Talking Sammich

New member
Messages
4
Reaction score
5
Points
3
I waited for 2 months only to find out it would be closer to december. I can tell you there currently isn't a limited awd in moonlight with black leather in texas, oklahoma, new mexico, and colorado, but I did find one in transit to a dealer in kansas.... sigh
 

CVP33

Member
Messages
70
Reaction score
48
Points
18
We bought ours 2 months ago and got $2,150 off MSRP which included the $500 conquest and $50 test drive. Ours was the limited without AWD. Frankly we don't need it in NC as FWD and all-season tires will handle what we call winter. As for demand, Kia/Hyundai sold a little over 11,000 Tellurides and Palisade's last month. Their estimates were WAY off as both are on pace to sell 60K units each. Unfortunately supply will artificially limit their sales. Our local dealers are already asking $1K to $5K over MSRP for what they have in stock. Limited AWD are impossible to find. Hyundai Motors definitely has a winner on their hands.
 

Palisade Forum

Staff member
Messages
174
Reaction score
105
Points
43
We bought ours 2 months ago and got $2,150 off MSRP which included the $500 conquest and $50 test drive. Ours was the limited without AWD. Frankly we don't need it in NC as FWD and all-season tires will handle what we call winter. As for demand, Kia/Hyundai sold a little over 11,000 Tellurides and Palisade's last month. Their estimates were WAY off as both are on pace to sell 60K units each. Unfortunately supply will artificially limit their sales. Our local dealers are already asking $1K to $5K over MSRP for what they have in stock. Limited AWD are impossible to find. Hyundai Motors definitely has a winner on their hands.
It was a great idea to buy before they were sure how well these would sell... You're right - both Kia and Hyundai have major hits on their hands with these Palisade and Telluride...
 

CVP33

Member
Messages
70
Reaction score
48
Points
18
It was a great idea to buy before they were sure how well these would sell... You're right - both Kia and Hyundai have major hits on their hands with these Palisade and Telluride...
More luck than anything else. I knew we were buying a Palisade or Telluride. I suspected we wouldn’t have much negotiating leverage. I made it clear we wanted an AWD model (not true) but would settle for the FWD they had in-stock. I’m confident that had we waited, we’d have paid more.
 

Talking Sammich

New member
Messages
4
Reaction score
5
Points
3
A personal friend at the big kia dealer in my area said that most tellurides are sold before they get them, but if not, less than 24hrs on the lot and that has been pretty much since the word go. I see tellurides uuurrrrvrywhere and of course now i can't help but palisades everywhere....mocking me, like a tiger in a washing machine
 

n1ghtcrawl3r

New member
Messages
2
Reaction score
0
Points
1
Just purchased my Ultimate last night (Canadian dealer). Through negotiations as well as first responder discount, was able to get $1700 off MSRP as well as mats, cargo tray, mud flaps and locking wheel nuts dealt in. Dealer advised delivery would be 4-8 weeks based on previously delivered orders. They also had a few on the lot that they had sold from inventory, though keeping at least two back for demos and test drives. I’m hoping the timeline they gave me is still reasonably accurate, but based on this I won’t count on it. Thanks for the info. Time will tell.
Can you share which dealer that was and what your final driveaway price was? I'm in Canada too - in the GTA
 

Pfb483

New member
Messages
11
Reaction score
3
Points
3
Can you share which dealer that was and what your final driveaway price was? I'm in Canada too - in the GTA
I was referred to the sales manager by a friend of his, so I’m sure some of the discounts and ‘freebies’ I was given were from that relationship. Final drive away was $54,316 CDN after another $750 taken off for Hyundai loyalty discount, but includes dealer admin fee, OMVIC, air tax, upcharge for white exterior, destination charge and environmental charge (you can’t escape those last ones). Ultimate trim. We bought from Kitchener Hyundai - not the dealer closest to us but we went there because of our friend’s connection and I believe it paid off. Hope this helps.
 
Top