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AUTOMOTIVE : Hyundai Anticipates Higher Sales in ’95 of Lower-Cost Vehicles

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Compiled by John O'Dell Times staff writer

Most industry analysts see 1995 as a year in which American buyers will gobble up about 15.5 million new cars and light trucks, up from 15 million in 1994.

But Hyundai Motor America in Fountain Valley is looking for a slight dip, to 14.9 million sales.

The high cost of cars today--a recent federal study pegged the average new car at $22,000--will dampen U.S. consumers’ enthusiasm, said N. Douglas Mazza, chief operating officer for the import and distribution arm of the South Korean auto maker Hyundai Motor Co.

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“In the 1980s, affordability came to mean ‘more is better, so buy the most you can get,’ ” Mazza said Wednesday in a speech in Detroit. “In the 1990s, people are recognizing it’s OK to have the ability to buy less because it’s all you can afford.”

Hyundai, which prices its cars at the lower end of the scale in each of its product niches, figures that it will be aided by the tightening of consumers’ purse strings. Mazza said Hyundai is projecting a 3% increase in U.S. sales, to 130,000 cars this year.

That would follow a 17% sales increase for the company in 1994--a year in which total car sales rose 6%.

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“This year’s slow start, at least for now, supports our theory,” Mazza said. The industry’s U.S. sales through February were down 3.1% from a year ago.

Mazza said Hyundai’s analysis is based on findings that many U.S. consumers are skeptical, uninterested in budgeting, personally insecure and devoting the bulk of their disposable income to personal items that “support cocooning.”

People younger than 35 are more likely to spend big dollars on computers or stereos and to buy used cars or inexpensive new ones, he said.

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“We don’t think an inexpensive car is $20,000 or even $11,000,” Mazza said, launching a sales pitch for Hyundai’s new Accent subcompact, which began reaching dealers last month, with prices starting around $8,100.

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