Hyundai Advances Clunker Cash to Dealers

Edward Niedermeyer
by Edward Niedermeyer

Hyundai has been a big winner in the European cash-for-clunker sweepstakes, and they’re preparing their US dealers for another boom. Bloomberg reports that Hyundai is advancing cash to dealers to “cover new-vehicle credits for consumers until the federal government completes rules for the program later this month and begins paying dealers.” And despite NHTSA warnings that “If a dealer chooses to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule,” deals are already being done. A Virginia dealership has already sold the first vehicle under Hyundai’s offer, replacing a 1995 Ford Explorer with an Elantra Touring. With a $15,000 fine threatened for deals that don’t comply with the program’s final rules, this is being done without the approval of the National Automobile Dealers Association.

Edward Niedermeyer
Edward Niedermeyer

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  • CapVandal CapVandal on Jul 03, 2009

    By the way, Hyundai is in a very nice position regarding currency. The KRW has strengthened a bit from lows earlier this year, but the tailwinds of devaluating a currency can be significant. This isn't everything, but I think people tend to underestimate the impact of currency -- The cumulative effect of a strong dollar over an extended period of time has been enormous. Now it's Japan's turn to show if their corporate strengths work without a tailwind.

  • Steven Lang Steven Lang on Jul 03, 2009

    I'm sorry to disappoint the bubble of optimism here. But Hyundai's quality overall is about equivalent to GM (which is actually pretty good for most models) and a bit less than Ford. Toyota, Honda and Nissan really accomplished themselves through the outstanding quality of their vehicles over the decades. Hyundai has very competitive quality. But it's nowhere near a differentiator like it was for these Japanese firms. As for their marketing? The best of the decade. Bar none. I would even put it ahead of Subaru whose advertisers are likely the gold standard in the industry at this point.

  • Stevelovescars Stevelovescars on Jul 03, 2009

    Kudos for Hyundai for being so aggressive and creative with their incentives. In comparison, GM came out with another 0% marketing special... the problem is that most consumers have simply come to expect 0% financing on their cars so it's hard to imagine that this is driving much incremental traffic. Frankly, does anyone buy a GM car without cash or financing on the hood anymore? They remind me of the furniture store where I grew up that had a "going out of business sale" every weekend for 5 years... nobody ever shopped there during he week!

  • RogerB34 RogerB34 on Jul 04, 2009

    "Hyundai ... and they’re preparing their US dealers for another boom." How to clean up auto installment loan body parts?