High Jobless Rate Dragging Down Auto Recovery
Podcast
INTERVIEW: Hyundai North America CEO John Krafcik talks with Jeff Gilbert and other reporters.
SUPERIOR TOWNSHIP (WWJ) As the government announces disappointing unemployment figures, Hyundai's top North American executive says the slow recovery will remain a drag on car sales for the rest of the year.
"We're not in the camp of thinking there's going to be some miraculous second half recovery," Hyundai North America CEO John Krafcik.
The economy only added 18 thousand jobs in June, the fewest in nine months. The jobless rate rose to 9.2 per cent.
Speaking to reporters at the company's technical center, Krafcik said the second half of the year should be similar to the first, because of "macro economic" factors that are weighing the economy down.
"Including housing, which really hasn't improved," he said. "Employment, still an issue."
While Krafcik predicted industry sales in the 13 million range this year, he said Hyundai will have its best year ever, topping 600 thousand sales for the first time.
"We'd appreciate it if you didn't write that Hyundai's benefited from the tsunami," said Krafcik, trying to downplay reports that car buyers who couldn't find Japanese brand vehicles have gone to Hyundai dealerships.
Krafcik said Hyundai's sales patterns before and after the March earthquake and tsunami were similar.
"With or without the tsunami and other issues, we think our sales results this year would have been the same," he said.
Most of Hyundai's sales gains came from Chevrolet and Nissan, said Krafcik. Nissan is the Japanese brand least effected by the disaster.
Hyundai is working to bring in more new buyers by showing journalists a new Accent small car and an updated Genesis big car. Both vehicles will be in the marketplace in the coming months.
A refreshed lineup, Krafcik says, allows Hyundai to gain sales, without adding a lot of incentives. Although he expects, as Honda and Toyota re stock their product pipelines, the Japanese brands increase their incentive spending.
"We do see the trend coming," he said. "It makes sense for them, because they did dial down a bit. So they are going to get their spending back to where it was, or maybe a little bit more."
Connect with Jeff Gilbert:
Email: jdgilbert@cbs.com
Twitter: @jefferygilbert
Facebook: facebook.com/carchronicles
