Hyundai Motor America's problems can be tied back to one thing: the overproduction of the wrong kinds of vehicles, says Andrew DiFeo, Hyundai's National Dealer Council chairman.
The company flooded the U.S. market with cars when demand was waning, which forced it to dispose of vehicles through fleet sales in recent years.
But DiFeo says Hyundai's product lineup is finally starting to match up with consumer demand. The year 2018 will be critical.
The Kona, the brand's first subcompact crossover, is due for a spring arrival. The peppy, reworked Veloster hatchback is expected to arrive in the second quarter. And the redesigned Santa Fe, the brand's top-selling midsize crossover, is coming later this year as well.
To revamp its car-heavy portfolio, Hyundai plans to introduce eight new or redesigned crossovers to the U.S. by 2020.
On the Genesis side, the G70 sports sedan will bolster the upstart luxury brand's lineup with a third model. The only question now is who will sell it when it arrives?
Genesis has selected 48 markets that will be launching pads for its stand-alone retail network, which will be made up of around 100 stores.
That's a huge drop from the 350 stores that are now eligible to sell the G80 and G90 luxury sedans under the Genesis Participation Agreement, which required dealers to set up a discrete Genesis showroom within their Hyundai stores. Of those 350 stores, the ones in the selected markets will get a chance to apply for the stand-alone locations. Dealers outside the Hyundai Motor America network have shown interest as well, but Genesis says they'll be put in a holding pattern for now.
Dealers who miss out on a stand-alone store will be compensated.
The Genesis compensation plan is intended to reimburse Hyundai dealers who invested in inventory, training and equipment to service Genesis products and help launch the brand. Settlement offers will also take sales volume into account.
DiFeo said the rocky rollout of the Genesis network hasn't been ideal, but he believes the brand has done the best it could to be fair. He knows, however, that some dealers will disagree with how the brand moves forward.
DiFeo said the council made clear that dealerships that don't get Genesis franchises and lose the right to sell its future products need to be taken care of.
"We stressed the importance that there needs to be compensation, and the compensation can't just be for buying back cars and parts," DiFeo said. "There is a loss of value in that dealer's business personally and professionally, and the numbers they're coming up with have to be commensurate with that. We never said, 'It needs to be this dollar amount.' But we said the calculation needs to factor in all of these things, and I think they got pretty close to that."
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