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“We knew this [shutdown] was going to have a big impact on our industry, and on people’s lives, and so when we reached out and said that we’re going to bring back the job-loss protection, that was really just the first step in now what’s become multiple layers of support,” said Brian Smith, COO of Hyundai Motor America.
Those layers, including 0 percent financing and 120 days before first payment, weren’t enough to prevent a 43 percent drop in Hyundai’s March U.S. sales. But the incentives are part of a big-picture strategy by Hyundai Motor Group to keep existing customers loyal and dealers solvent, and to lay the groundwork for a return to the core goals of gaining market share and improving margins. Kia doesn’t have a job-loss program but is offering aggressive financing, payment deferrals and discounts on new vehicles.
The group’s brands also joined in the fight against the coronavirus. Hyundai and Genesis have pledged $4 million in grants to provide cash and testing kits at drive-through testing stations at 22 locations across the U.S. Kia has donated $1 million to assist homeless youth.
“I think there are going to be consumers who see what Hyundai’s done through this process — taking care of customers with the programs we’ve talked about or our investment in trying to help hospitals deal with their challenges — and they’re going to become Hyundai customers in the future,” said Smith.
The Korean automakers also have fundamentals in their favor once the market recovers. One is product: Hyundai and Kia still have inexpensive cars in their lineups that could be in demand as consumers look for economy over style. They also have inexpensive crossovers.
“Things have worked out in their favor because they haven’t discontinued all their smaller, more affordable cars yet,” said Sam Abuelsamid, principal research analyst at Navigant Research. And small crossovers such as the Hyundai Venue and Kia Seltos — both new models — “are available at a more reasonable price point than pretty much anything you could buy from a Ford dealer today,” he said.