The Hyundai Palisade has been a smash hit since it went on sale as a 2018 model. Demand has remained high, despite many owners' complaints of stinky leather seats, an issue that was recently resolved. And then came the semiconductor chip situation, a crisis that remains ongoing. Demand for new vehicles remains high in most markets and automakers continue to maintain sufficient production levels.

Now we're hearing from The Korean Car Blog that Hyundai is having problems at its Ulsan plant in South Korea where the three-row premium SUV is built. This is the sole plant that exports Palisades to the US and it apparently cannot keep up with orders.

Presently, around 6,000 to 7,000 units are being shipped to the US per month. But the problem is that Hyundai normally sells between 8,000 to 9,000 units monthly. That supply shortage is quickly causing problems. The last thing Hyundai wants is to lose customers. What can be done? There are reportedly a couple of solutions being examined.

The first would be to transfer some of the production to Hyundai's plant in Alabama. Alternatively, Hyundai could relocate production domestically to another one of its plants. Whatever is decided must be approved by the labor union in Korea. Based on facts on the ground, it appears the domestic option will be chosen because the union won't accept US production.

They're concerned about the long-term ramifications. The second Korean plant, charged with building the upcoming Staria minivan, could handle the job but the union remains reluctant to lose any Palisade production at all, despite the current slowdown. Meanwhile, Hyundai management is trying to negotiate a solution because the lack of new Palisades cannot continue.

Last year, a total of 81,905 units were sold in the US alone, a significant increase over 2019's 28,736, though it didn't go on sale until June of that year. So far this year, Palisade sales seem to remain on track to exceed 2020's figures. That is, of course, if production can get get back on track.