Who's laughing now?
Many automakers took a conservative and calculated approach regarding new vehicle inventory just as the coronavirus pandemic struck, but not Hyundai. The South Korean automaker essentially took the opposite approach by making sure its nationwide dealerships had enough inventory on hand. Combined with its 0 percent financing for 84 months offer with deferred payments for up to 120 days last March, buyers responded. But if Hyundai didn't take that inventory chance to begin with, then it couldn't have met demand. And that's where it's succeeding today where some rivals are not.
Automotive News spoke to Hyundai North America vice president of national sales, Randy Parker, about this gutsy decision.
"We elected to be very aggressive upfront to demonstrate leadership, to demonstrate confidence in the company and to provide resources for our dealers to get engaged" he said. "We created this win-win scenario where we provided an upfront stipend to the dealers if they were willing to take cars." The results are now speaking for themselves.
Last month, Hyundai's retail sales were 4.7 percent higher than in May 2019. The Hyundai Tucson, for example, sold 15,552 units last month compared to 15,616 the previous May. Given there was no pandemic at that time, May 2020 was an amazing month. The Hyundai Santa Fe also sold quite well with 9,549 units compared to 13,807 in May 2019. The all-new three-row Hyundai Palisade also pulled off an impressive month with 7,866 units.
"None of us would have guessed that, on a pure retail perspective, we would have been up 4.7 percent on a year-over-year basis," Parker added. Not only does Hyundai have more than enough crossovers to sell, but its Alabama production plant, home of the Sonata and Elantra, has gone back online and can thus guarantee sufficient supply for those sedans.
Dealers, needless to say, are thrilled by the company's once-controversial decision. As other automakers struggle to get their factories back to normal capacity, Hyundai continues to sail through the storm relatively unbuffered.