Hyundai has made incredible gains in the global market, challenging larger automakers in markets they once dominated. While Volkswagen has globally sold a record number of vehicles in 2011, Hyundai Motors and its Kia affiliate have exceeded VW’s numbers in the United States. According to senior analyst of auto website Edmunds.com Jessica Caldwell, “Hyundai offers compelling design at an affordable price– a win-win for must consumers. Brand exposure has long been the problem for Hyundai, but that has certainly eased.” The South Korean automaker has made some smart moves to gain publicity, including ads aired during the Super Bowl as well as the company’s sponsorship of the World Cup.

The pressure on Volkswagen doesn’t end at North America, however, as Hyundai intends to bring the fight to Europe as well. Chief operating officer Allan Rushforth for Hyundai Europe said, “It’s very important for Hyundai to be successful. Europe is a top priority because it affects how the company is perceived elsewhere.”

Just as European nations tackle a debt crisis and consumers face austerity measures, Hyundai looks to offer products that mix great value, reliability, European styling and handling. While Volkswagen focuses its attention on challenging GM and surpassing them for the title as world’s largest automaker, Hyundai sneaked up on the German Automaker as Stefan Bratzel, director of the Center of Automotive Management at Germany’s University of Applied Sciences, said, “Hyundai is one of VW’s most serious challengers. The mix of good value, quality and design is a solid basis, and they’ve been getting more innovative every year.”

During the Frankfurt Auto Show in September, a video was posted on YouTube capturing a concerned conversation between VW CEO Martin Wintekorn and his associates at Hyundai’s show floor. Upon studying the adjustable steering column inside the Hyundai i30, Winterkorn  noted, “Nothing rattles. Why can they do it? BMW can’t. We Can’t.”

Winterkorn adds, “It’s become increasingly clear that whoever’s at the front has a lot of opponents. Our competitors are attacking Volkswagen all over the world.”

For Hyundai’s European offensive, the South Korean automaker has prepared a $12.4 billion investment, intended for plant upgrades and vehicle technology development.  Meanwhile, Volkswagen steels itself against imminent competition by holding onto a 62.4 billion euro budget to invest in factories and new vehicles over the next five years.

GALLERY: Hyundai Elantra

[Source: Bloomberg]

For the last number of years, automakers have been pushing gas-electric products at auto shows across the world. However, according to researcher LMC Automotive, hybrid sales in the United States have slowed last year to 2.2 percent compared to 2.4 percent in 2010.

Mike Jackson, chief executive of auto retail chain AutoNation Inc., said that while 75 percent of customers that walked into his showrooms wanted to talk about hybrids, hybrids only make 2.5 percent of AutoNation sales. Jackson revealed, “What happens from the 75 percent consideration to the 2.5 percent commitment? They look at the price premium for the technology, which is already subsidized and discounted, and say ‘the payback period is too long; not for me.’ It’s a back-of-the envelope conversation on the part of the American consumer.”

According to Chevrolet vice president of U.S. marketing Chris Perry, the Chevy Volt gets people into the showroom but with less than 8,000 units sold last year, consumers often entered a dealer to have a look at the Volt but eventually left with something else.

The challenge hybrids face is the continuing development of the conventional internal combustion engines. David Champion, senior director of the Auto Test Center of Consumer Reports, pointed out that the basic Honda Civic reaches a 32 mpg combined city and highway mileage while the Civic hybrid achieves 44 mpg. Saving a consumer approximately $322 dollars a year in fuel, the sticker price premium will require an owner to operate the Civic hybrid more than six years to see any financial advantages.

Realizing the trend here, Ford has dropped plans for a hybrid version of the next generation Escape crossover.

What’s more, improvements to an internal combustion engine can potentially improve fuel economy by 40 percent while costing an extra $2,000 per model by 2020. Weight reduction and better aerodynamics can lower fuel consumption by up to 10 percent and would account for costs of approximately $200 per car by 2020. Comparatively, the battery in an electric car still adds $10,000 to the price of a car at current costs in technology and remains a challenge to reduce in the near future.

Scott Corwin, vice president of consulting firm Booz & Co., New York, explained, “The advantages of hybrids are getting harder to justify. It’s the cost differential. Consumers are rational and they understand the cost of ownership.”

Despite the unpopularity, hybrids remain important to every automaker’s strategy, even if it’s just to attract prospective customers into dealerships or to showcase a company’s dedication to green technology. Ford showed off its new Fusion hybrid family sedan at the Detroit Auto Show. Toyota expands its Prius range with a Prius C, costing just $19,000 and achieving 50 mpg.

[Source: Bloomberg]

Since the 2007-2009 economic recession, the automotive retail market displayed a drop in new car-sales and the increased demand for used vehicles. For 2012, data indicates that it will be more of the same.

Jonathan Banks, Executive Auto Analyst for the NADA Used Car Guide, explained, “The average trade-in value of a 3-year-old used car is 8 percent higher in January 2012 compared to last January. We expect this trend of higher trade-in values to continue throughout the year.”

Essentially, Banks noted there were two reasons for the ongoing trend in used car value. First, NADA analysts predict a 7 percent decline in used vehicle supply for 2012. The off-lease supply, which accounts for a large number of pre-owned vehicles, is estimated to have fallen by 22 percent for 2012.

“Banks says, “The depreciation rate of used vehicles this year will be slower than it has been at any other time in recent history because of reduced inventory, which will keep prices on used models in demand at a premium.”

The second factor attributing to the value of used vehicles is the continuing demand for them. The average age of vehicles currently on the road are at nearly 11 years old. However, Jonathan Banks believes the demand for both new and used cars will increase for 2012.

“Strong consumer demand for late-model used vehicles and a continued reduction in supply will drive up prices this year. For many car buyers who are concerned about cost and economic uncertainty, the used-vehicle market will remain a viable option.”

The 2012 Nissan Cube is getting a little more expensive, though not by a significant margin. The company chose to raise the base price $260 to $15,760, which includes a $780 destination charge.

The real news is that the decision to cut back from four to three versions of the box on wheels has been confirmed. Their top-of-the-line 1.8 S Krom Edition isn’t available anymore, leaving potential buyers to choose from the formerly mid-range 1.8 SL, the 1.8 S mid-range or the 1.8 S base model, priced $19,300, $17,200 and $15,760 respectively.

The Indigo Limited Edition is also available and costs $1,900 to add to the base model, making it slightly more expensive than the mid range car. That near $2 grand package gives you indigo seats, navigation, a rear view moniter, Rockford Fosgate audio, Nissan Intelligent Key and 15-inch aluminum alloys.

You can expect the same 1.8-liter inline four under the hood, making 122 hp and mated to either a continuously variable transmission or a 6-speed manual.

There are five new colors to choose from, though the only real change over last year is “Bali Blue” replacing “Sapphire Black Pearl.” Whatever they choose to call the shades of paint, we won’t be totally shocked if the cube sees further cuts after this year.

The strangely shaped car sold a sorry 198 units last October, well after we would have expected tsunami-related recovery to take place. It was also discontinued in Europe about a year ago. In fact, the vehicle hasn’t done well anywhere but Japan.

Acura closed the year on a sour sales note with the new year resolution to move on with their brand despite most car companies being on the rebound.

This year, Acura fans and new customers alike can look forward to a refreshed and redesigned Acura, less focused on competing with the luxury segment and more focused on a mid-market segment between what Honda already offers and the premium car market. So why the change?

The Acura MDX only sold 4,588 units this year, down more than 22 percent over last year. Total sales also dropped eight percent, marking a bad year for the brand.

Honda has often been criticized for stepping too closely within their comfort zone with the Acura variations on their cars, as many owners felt like they were driving slightly fancier Civics.

That doesn’t mean the horse is ready for the glue factory just yet, though. Honda has a plan to make Acura more competitive, including a new NSX, set to debut at next week’s North American International Auto Show.

While supercars are nice, they have never sold in high volume and can’t come close to rescuing a lame duck brand. However, writing Acura off as a lame duck, despite comparatively poor sales, is probably rash. The company plans to debut a line of totally redesigned cars starting this spring in an effort to rethink the brand.

“Acura will start off 2012 strong with the debut of three all-new products at the North American International Auto Show. Although we still had low inventory in December, our production levels are now back to normal. With a great line-up of products and all-new ILX and RDX models coming in the spring, 2012 will be a very good year for Acura,” said an Acura representative.

Stay in touch with us next week as we unveil more details about Acura’s new models and their plan for the coming year.

German luxury titans Audi and BMW are migrating to a new battlefield in hopes of growing their brands despite domestic debt worries.

According to Jenny Gu, a Shanghai- based analyst at research firm LMC Automotive, the number of luxury cars sold in China for 2011 may  increase by 39 percent to 939,000, overtaking Germany by 25,000.

That 2.7 percent margin might not seem like a lot, but Europe as a whole is on a downswing for premium products. China, on the other hand, is growing rapidly. Gu expects Chinese sales to increase 16 percent next year, eclipsing the forecast 4.4 percent for Germany.

“Luxury car demand is still on the rise in China with low penetration rates,” Gu said to Bloomberg. “Sales of such cars in developed markets like Germany fluctuate together with the economic cycle.”

Despite BMW’s lead as the largest luxury manufacturer worldwide, Audi actually beats them in China— something they hope will boost them toward their goal to beat Bimmer for the top spot by 2015.

While it sure isn’t over until the lederhosen-laden fat lady sings, this year might serve as an indicator of things to come. Audi enjoyed a meteoric 69 percent sales spike in China this year, as compared to Mercedes-Benz‘ 24 percent and BMW with a measly 9.8 percent growth.

Those numbers seem to have BMW and Mercedes scrambling, both automakers will keep their plants open an additional week this year by limiting holiday closures. Audi, on the other hand, will enjoy the full two weeks that the other two have forgone for a second year running.

Though some analysts are predicting a softening in the Chinese market thanks to stricter mortgage regulation, Olaf Kastner, CEO of BMW’s Chinese venture, Brilliance China Automotive Holdings Ltd. doesn’t seem concerned.

“The premium car industry has enjoyed over the past two to three years an amazing growth,” Kastner said to Bloomberg. “We still, in the premium segment, will see a higher growth rate than the mass segment” for next year.

[Source: Automotive News]

Volkswagen AG isn’t afraid of the euro zone debt crisis. They expect Audi, their premium brand, to continue growing in 2012 according to Audi CEO Rupert Stadler.

Stadler told WirtschaftsWoche “There’s a good chance for further growth next year… Therefore, we will keep investing and not start saving money.”

He also confirmed Audi’s 1.3 million vehicle sales figure, saying they plan to sell 1.5 million by 2015. Audi surpassed Mercedes-Benz in sales this year for the first time in history to become the number 2 luxury car manufacturer. BMW remained the largest, selling more than 1.5 million by December.

Despite the european debt crisis, German luxury cars in general have seen positive growth, largely thanks to growth in other parts of the wold like Russia and China where demand remains strong.

[Source: Automotive News]

The tumultuous world economy doesn’t seem to be having an affect on Porsche, their sales are up 25 percent over last year at this time.

“In the current year, we have already set new customer delivery and order book records,” said Bernhard Maier, Porsche AG board of management member for sales and marketing.

The company saw the most growth in China where sales are up a whopping 68.8 percent, but it could have been a much better year despite the positive surge. Domestic sales actually suffered, and Porsche posting the weakest growth at home in Europe. They suffered the most in Germany, where this month they actually reported negative growth.

Those numbers don’t show up in the overall picture though, because Porsche enjoyed strong sales in Italy that balanced their numbers across Europe and pushed them marginally into positive territory.

Despite November being a relatively bad month compared to the rest of the year, compared to November, 2010, the company is selling 20 percent more cars.

It’s been a good year for German cars overall, with BMW sitting at the top of their segment, and Audi for the first time in history passing Mercedes-Benz to become the number two luxury manufacturer.

As for Porsche, they company seems pleased with their sales numbers, even during their recent model changover that includes an updated Carrera capable of screaming from 0-60 mph in as little as 3.9 seconds— get excited.

Unless there’s some sort of Christmas miracle in Mercedes showrooms, Audi is set to pass their competitor for the first time to take the number 2 spot for global luxury car sales.

The company’s sales volume grew by 18 percent this year, compared to Mercedes’ seven. Though the numbers aren’t final until the ball drops in Times Square, Audi is sitting pretty with more than 56,500 units to hold over Mercedes, meaning the title is as good as theirs.

Of course, nether Audi nor Mercedes are happy with sitting behind BMW. Both companies claim plans to make the number 1 spot, though in different time frames.

Daimler CEO Dieter Zetsche told Automotive News Europe earlier this year that they plan to be the top company in sales and profitability by 2020. Meanwhile, Audi is laying claim to that same goal, but by 2015.

Don’t expect BMW to sit back on their laurels either, though, the Bavarian automaker made it clear earlier this year in an interview with Automotive News that they have plans to stay on top.

Gallery: 2013 Audi A4

[Source: Automotive News]

The slow-selling Fiat 500 hit another snag after NHTSA gave the compact car a three-star crash test rating, a dismal score in an era where five-star ratings are practically ubiquitous.

While the 500 got four stars in the frontal crash and rollover tests, the side impact result was a poor two stars. Only the now-dead Dodge Caliber and the Ford Escape (set to be replaced after a decade in production) have achieved similar ratings. The 500′s fellow subcompact competitors like the Toyota Yaris, Honda Fit and Chevrolet Sonic have yet to be crash tested.

The Fiat has been plagued by slow sales, with Chrysler reporting a 173-day supply for the vehicles, and three consecutive months of declining sales figures.

[Source: Automotive News]