Hyundai Shifts Into 2014 With 'Dealer Guy' At Wheel

by , Dec 30, 2013, 7:51 AM
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The news Friday that John Krafcik, whose five-year contract to lead Hyundai Motor America expires at the end of the year, was stepping down seemed to surprise most observers with words like “abrupt,” “surprise” and “unexpected” featured prominently in ledes and headlines. David Zuchowski, who has been Hyundai’s EVP of sales, will succeed him as president and CEO. Analysts and journalists on the automotive beat were not the only ones who didn’t see it coming.

Zuchowski, who has been Hyundai’s EVP of sales, told Forbes contributor Dale Buss that “the move was ‘a complete surprise’ to him but stressed that ‘the very nice thing here is I’m coming into a situation that I’m very familiar with. We have a good strategy and business plan in place, and my job is to step into the role to take it from here.’”

Krafcik joined Hyundai from Ford in 2004 to lead product development and strategic planning; he took over as president and CEO of U.S. sales in 2008.

“Under his leadership, Hyundai's U.S. market share nearly doubled,” Mike Ramsey reports in the Wall Street Journal. “At the end of 2008, Hyundai's market share was 3%. By the end of 2011, it had leapt to 5.1%, but tailed off to 4.6% through November of this year, in large part because of supply constraints.”

“It’s been a sincere privilege and honor to lead Hyundai Motor America over the past five years, and I am confident that with Dave’s succession, our brand will continue to expand and thrive for years to come,” Krafcik said in a statement that announced that he would “step down” when the New Year celebration begins in Costa Mesa, Calif., tomorrow.

Although Krafcik was generally lauded for his tenure at Hyundai, it was a little like a star quarterback’s team having a bad season —even if it wasn’t his fault — in the last year of his contract. 

“The automaker had a rough start to the year, when its factories reached their maximum capacity to build cars,” points out the Los Angeles Times’ Ronald D. White, contributing to a meager 1.9% growth rate for the first half of the year compared to the overall market's 8.4% pace.

“John Krafcik has been focused on increasing Hyundai’s brand value in the U.S. market,” Lee Sang Hyun, an analyst at NH Investment & Securities Co. in Seoul, told Bloomberg’s Craig Trudell. “It seems Hyundai as a company decided that next year’s focus should be on boosting sales and that Zuchowski was the right person to do the job.”

But Trudell also points out that Hyundai chairman “Chung Mong Koo has chosen to push for improved quality over substantial additions to Hyundai and Kia’s North American manufacturing capacity the last two years. That has stretched thin the carmakers’ ability to keep pace.”

The decrease in sales came on top of an Environmental Protection Agency report in November 2012 that determined that Hyundai and sibling/rival Kia had overstated gas mileage claims on the window stickers of 13 models across the 2011, 2012 and 2013 model years. The two companies announced last week that $395 million has been set aside to settle a class action lawsuit by reimbursing about 900,000 owners of vehicles — 600,000 of them Hyundai purchasers — bought under the incorrect mileage figures, as Green Car Reports’ Anthony Ingram tells us

According to Hyundai spokesman Jim Trainor, however, Krafcik’s departure “has nothing to do, in any way, with issues regarding misstatements of fuel economy by the company. The issues are completely unrelated and there is no connection whatsoever,” Torque News’ Keith Griffin reports

Zuchowski sees the forthcoming launches of a new Genesis in the first half of 2014 and a new Sonata in the second as critical. “Product is everything in our business,” he tells Buss on Forbes.com, “and ensuring the successful launch of those two products is the top thing I can do.”

Zuchowski, who was effusive in praising Krafcik in several interviews, “is a dealer guy,” Scott Fink, chairman of Hyundai's dealer council and owner of three Hyundai dealerships in Florida, tells Automotive News’ Ryan Beene. “He understands the business, he can talk to the dealers, he can talk to the Koreans. He's a brilliant guy.”

In the company statement, COO Im Tak Uk said, “Dave has consistently distinguished himself as a results-oriented and motivational leader in our industry. We are confident that he is the right choice to build on John’s momentum.”

He might start by using some flash cards to memorize the names and faces of reporters on the beat.

“Krafcik was, by far, the most personable of the automotive CEOs on the scene,” writes Torque News’ Griffin. “With an amazing facility for names, he was immensely popular among automotive journalists.”

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