After Hyundai’s American division canned former CEO David Zuchowski for failing to meet internal sales targets last December, it’s no mystery what Job One is for the new guy.
Kyung Soo Lee, a 61-year-old veteran of the company who started his career back in 1982, takes the helm of a troubled ship next week, Hyundai announced Thursday. As president and CEO, Lee (Kenny to his friends) is responsible for reversing a dismal sales trend that sunk his predecessor, as well as the company’s U.S. fortunes.
Long gone are the rosy days following the recession, where Hyundai Motor America recorded skyrocketing sales growth as its rivals were still struggling to find their feet. Unfortunately, with too many cars and not enough hot-selling utility vehicles, the tide began turning in 2013. Growth that year was poor, and the years following saw the company’s sales trajectory follow that of an ice-laden jetliner with one engine set at idle.
Through August, the automaker’s 2017 U.S. sales are down 21 percent. The buying public’s rapid shift to trucks, crossovers and SUVs caught the company off guard, and plans were afoot to remedy the paltry SUV lineup even before Zuchowski was ushered out the door. Plans, it should be noted, that’ll take time to come to fruition.
Regardless of what might be keeping Hyundai execs up at night, the company’s public face is one of confidence and guarded optimism.
“Mr. Lee has an in-depth understanding of Hyundai Motor’s global operation, following nearly two decades in diverse markets around the world, including the U.S., Europe and Latin America,” said Won-hee Lee, president and CEO of Hyundai Motor Company, in a statement. (As of September 18th, interim CEO Jerry Flannery returns to his post as the company’s executive vice president, among other duties.)
It’s clear that Lee, who Hyundai calls “one of the most respected leaders” in its global operation, knows exactly what’s expected of him.
“I’m honored and motivated to have been selected to lead Hyundai Motor America in one of the most interesting times in the automotive industry’s history and to reinvigorate momentum in the strategically important U.S. market,” said Lee in a statement, adding, “We have significant opportunities ahead of us.”
Lee could just as easily replaced “opportunities” with “challenges.” Indeed, there are many.
With Chinese buyers turning away from the brand for geopolitical reasons, Hyundai needs a strong showing in traditionally strong markets. However, in May of this year, sister division Kia outsold Hyundai for the first time in America. The refreshed 2018 Sonata midsize sedan, while more attractive than its predecessor, faces an all-new Toyota Camry and Honda Accord in a shrinking segment. A hoped-for uptick in sales has yet to materialize.
Sending more sedans to fleet customers and boosting incentives has helped move some of the inventory backlog, but it’s cutting into the automaker’s profits. Meanwhile, dealers are becoming annoyed with the company’s sales tactics.
On the ground, the company faces rail-related distribution issues that continue to this day.
What Hyundai needs to prop up its U.S. operations is more utility vehicles. The Zuchowski-era plan calls for a revamp of the brand’s existing crossovers, plus the addition of new models. The small Kona crossover arrives in early 2018 to score some sales in the subcompact segment, while a long-rumored pickup truck has finally been given a green light — though when we’ll see it, and what form it will take, remains a mystery.
It will be an interesting first few months on the job for Lee.