Hyundai Motor Replaces U.S. Chief to Revitalize Sales in 2014
David Zuchowski, executive vice president of sales, was appointed as president and CEO effective Jan. 1, the Seoul-based company said in a statement on Dec. 27. Zuchowski replaces John Krafcik, 52, whose contract expires at the end of this year, the company said.
The replacement comes after sales at Hyundai and its affiliate Kia Motors Corp. trailed industrywide U.S. sales pace in each month since September 2012 and after models at both companies failed to earn the Insurance Institute for Highway Safety’s highest safety award for 2014. Hyundai is counting on the revamped Genesis, which won the North American Car of the Year award in 2009, and the new Sonata sedan, the company’s bread-and-butter model, to boost sales in the U.S.
“Dave is known to be a very active and results-oriented leader, who puts strong emphasis on the company’s sales operations,” Shin Chung Kwan, an analyst at KB Investment & Securities Co. in Seoul, said by phone. “Hyundai’s aggressive but logical management change comes after Hyundai’s disappointing IIHS test results and is in time to take steps to have its new products boost sales in the U.S. next year.”
Zuchowski, who joined Hyundai in February 2007, has been in charge of all sales, sales operations, and dealer relations, the company said. He has been in the auto industry for 33 years, beginning his career at Ford Motor Co., and was responsible for sales at Mazda Motor Corp.’s U.S. unit prior to joining Hyundai.
Hyundai’s Elantra was the only model at the automaker to win a Top Safety Pick award out of 39 vehicles, according to an IIHS release on Dec. 19.
Before its recent slowdown, Hyundai outperformed other automakers in the U.S. market during Krafcik’s tenure. He joined the company in 2004 as vice president of product development and strategic planning and became CEO of the U.S. unit in late 2008.
While Hyundai’s market share this year has slipped by 0.3 percentage point to 4.6 percent through November, the company claimed just 2.5 percent of the market in Krafcik’s first year with the company, according to researcher Autodata Corp.
The U.S. was Hyundai’s biggest market after China in the first nine months of the year, according to a company statement on Oct. 24.
The Hyundai Assurance program, a promotion in which the carmaker offered to buy back vehicles from customers who lost their jobs amid the recession in 2009, and redesigns to cars including the Genesis sedan and Elantra compact won over buyers.
Krafcik “oversaw the Korean carmaker’s growth while developing several innovative branding exercises,” Karl Brauer, an analyst for auto researcher Kelley Blue Book, said in an e-mail. “He would be a powerful addition to any automaker’s executive team.”
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.
Chris Hosford, a Hyundai spokesman, declined to comment beyond the statement.
Hyundai last month unveiled a revamped all-wheel-drive Genesis premium sedan that will go on sale in the U.S. next year to revive flagging sales in the model’s largest market. The all-new Genesis, which competes with Bayerische Motoren Werke AG’s 5-series and Daimler AG (DAI)’s Mercedes Benz E-Class in the midsized premium sedan market, will also be introduced in Europe next year, its first premium model in the market, the company said Nov. 26.
The new model and the replacement of the head of the U.S. unit come as the Seoul-based carmaker is suffering from an appreciating won.
Third-quarter profit at Hyundai fell 11 percent from the previous three months to 2.14 trillion won ($2 billion), the company said Oct. 24. Net income advanced 5.6 percent from a year earlier.
The won has gained about 22 percent against the yen this year, curbing Hyundai and affiliate Kia’s competitiveness against Japanese automakers in U.S. exports. The won strengthened 0.5 percent to 1,054 won per dollar in Seoul on Dec. 27, data compiled by Bloomberg show.
Hyundai’s incentives in the U.S. surged 47 percent in the first nine months of this year, compared with a 2.2 percent decline at Toyota and the market average of a 2.4 percent increase, according to Autodata.
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