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,” Krafcik says. “We've taken that off the table for them.”
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,” he says.
The program has sparked retail sales, says 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 reports, giving much of the credit to the buy-back offer. “This is incredible,” he says.
Other auto makers “are working diligently on similar programs that address the economic realities facing consumers today,” Krafcik says.
“We're looking at it, though we have no intent to match it,” Mazda North American Operations CEO Jim O'Sullivan says of Hyundai Assurance. “But you've got to be creative.“