DALLAS – Hyundai Motor America is back in the fleet business after abandoning it so that its dealers had enough inventory for their retail sales, says Randy Parker, the company’s CEO.
“We wanted to make sure our dealers were flush with vehicles” during an industrywide, ongoing inventory famine caused by a shortage of microchips, he says.
“It’s not that we don’t love our fleet customers,” Parker says. But, “We felt we owed it to our dealership network to focus on retail.”
Hyundai halted fleet deliveries for nine months last year, resuming in October. Fleet sales to customers, such as rental-car companies and local governments, accounted for only 2% of Hyundai sales in 2022.
Consequently, “we set an all-time retail market-share record,” Parker says at J.D. Power’s Auto Summit held in conjunction with the 2023 NADA Show.
Hyundai has concentrated on building and selling popular CUVs. “You fish where the fish are,” Parker says during an onstage conversation with J.D. Power President and CEO Dave Habiger. “But 30% of our sales were passenger cars.”
At the conference attended by many dealers, Parker says an automaker needs “strong dealer engagement” because “once you lose your distribution system, it’s hard to get it back.”
Hyundai has 800 dealers in the U.S. and 100 have built new facilities. Another 350 Hyundai dealership construction projects will be completed this year, Parker says.
The inventory shortage is slowly abating, but new issues of concern for the auto industry are rising interest rates and inflation. Those economic factors could hurt sales.
“Our plan is to grow this year, but it is not going to be easy,” says Parker, a 30-year industry veteran who started his career at GMAC and has worked for four auto companies.
He calls 2022 “the year of the microchip shortage.” He labels 2023 as “the year of affordability.”