Hyundai plant's future rides on new-look Santa Fe

Things have been slow at the Hyundai assembly plant in Montgomery, meaning fewer work days for its thousands of employees. That’s about to change.

The company on Wednesday unveiled a redesigned Santa Fe that’s expected to anchor Hyundai’s push to better cater to the SUV-hungry U.S. market. And it will be assembled entirely in Montgomery.

The sprawling plant was made to build sedans and churned out its two most popular models — the Sonata and Elantra — for years as sedan sales soared. But as gas prices dropped, so did sedan demand. The plant started building some Santa Fes two years ago but was still rolling out too many cars, leading to layoffs of some temporary employees and mid-week shutdowns of the assembly line.

“We’re not in full capacity utilization of where we’d like to be,” said Chris Susock, vice president of production operations at the plant. “But come June with the launch of the Santa Fe, we’re going to raise the level of capacity.”

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The mid-sized SUV made its debut Wednesday at the New York International Auto Show. A group of local leaders including Montgomery Mayor Todd Strange were in New York for the announcement.

It features an aggressive look, more cabin space, and more standard comfort and safety features. There won’t be a Sport version of the new model – instead, the company is offering three different powertrain packages with different levels of muscle, including a turbocharged four-cylinder engine with an estimated 235 horsepower.

It may need it for the uphill climb ahead.

Santa Fe sales were up in February and trending higher in a segment that’s on the rise overall. It was the company’s No. 2 best-seller and a standout in a month when Hyundai’s sales dropped 13 percent overall year-over-year. Yet it was just No. 11 among mid-sized SUVs or crossovers, with less than half the sales of the segment-leading Ford Explorer.

The South Korea-made Tucson compact SUV landed its best February sales total ever, jumping 31 percent year-over-year. Yet it made up only 3.5 percent of total sales for the segment.

“It takes time to shift the portfolio,” Autotrader Analyst Michelle Krebs said.

As everyone scrambles to get a piece of the SUV market, the overall pie is shrinking. Autotrader and Kelley Blue Book are predicting auto sales to dip this year. The situation is especially “ugly” now for the mid-sized car segment where Hyundai has thrived over the years, even for automakers at the top of the pile.

She’s predicting more production cuts ahead, industry-wide. “Nobody’s going to have a cakewalk,” Krebs said.

In that environment, she said few companies have a bigger challenge ahead than Hyundai.

But the mood was upbeat Wednesday at the Montgomery plant as employees chatted and circled a new Santa Fe, painted a color they're tentatively calling "lava orange."

Susock said they're “very excited” about the heavier workload they’ll have over the next year. And he was confident the public will like what they see with the redesign.

“We really believe that we’ve got a hot seller here,” Susock said.