CHICAGO – The Hyundai Assurance Program, in which the auto maker will buy back its vehicles if the owners’ lose their jobs within 12 months of purchase, has succeeded on two fronts.
One, Hyundai Motor America says it has repurchased only two vehicles since the offer’s Jan. 3 start.
Two, the program has spurred car sales by removing a fear factor prevalent during today’s economic woes, Hyundai CEO and President John Krafcik says.
“A lot of people are in a position of still needing a car but worrying about losing their job,” he says at the Chicago Auto Show, where a banner touting the program has a prominent spot at the Hyundai display.
“Hyundai Assurance speaks to their fears of vehicle repossession and damaged credit rating,” he says. “We’ve taken that off the table for them.”
Consumer confidence and brisk car sales are inextricably linked. Conversely, unconfident consumers during periods of economic uncertainty are less likely to buy big-ticket products, such as cars, says Paul Taylor, the National Automobile Dealers Assn.’s chief economist.
“If you can reduce the fear, you can restore the confidence,” Krafcik says.
At a time when the national unemployment rate has climbed to 7.6%, “we’ve mitigated much of the negative impact that fear-of-job-loss has on automotive sales.”
The program has helped retail sales dramatically, according to Rick Case, the first Hyundai dealer in the U.S. and owner of six Hyundai stores in Florida, Georgia and Ohio.
His Hyundai sales jumped 60% from in January 2008 from year-ago. While national new-car sales were down 37%, Hyundai saw a 14% increase, Case says, giving much of the credit to the buy-back offer.
“This is incredible,” he says. “The Hyundai Assurance Program has people motivated.”
The South Korean auto maker brought the offer to market by partnering with EFG Companies, a Dallas-based firm specializing in dealership training and finance and insurance products.
Other auto makers “are working diligently on similar programs that address the economic realities facing consumers today,” Krafcik says.