By on June 6, 2017

Capitol Hyundai San Francisco dealer - Image: Hyundai

Updated at 10:00pm on June 6 with response from Hyundai.

Derrick Hatami, Hyundai Motor America’s vice president of sales for less than two years, has been removed from Hyundai’s leadership team as of today, June 6, 2017.

After record annual volume in the 2016 calendar year, Hyundai’s U.S. sales have been falling fast throughout 2017. Year-over-year, Hyundai volume declined in each of the last six months, including an 18-percent decline in May 2017.

That decline enabled partner brand Kia to outsell Hyundai for the first time in the brands’ U.S. history, evidently a source of embarrassment for Hyundai. Having already forced out the company’s U.S. CEO, Dave Zuchowski, just before Christmas last year after Hyundai’s rapid growth stalled, Derrick Hatami’s departure leaves a hole that will be filled in the interim by Hyundai’s southern regional general manager, Sam Brnovich, according to Automotive News.

Last week, Hyundai wasn’t short on excuses for the company’s poor May performance. This week, the excuses were apparently not good enough.

Prior to his tenure as Hyundai Motor America’s sales leader, Derrick Hatami was, in fact, previously a Hyundai employee. A graduate of the Massachusetts Institute of Technology, Hatami became Hyundai’s director of revenue management and strategic planning in 2005. Hatami moved up Hyundai’s corporate ladder to become the general manager of the U.S. western region in 2010.

LinkedIn Derrick Hatami - Image: Derrick Hatami LinkedIn

Hatami switched allegiances in 2014 for a 21-month run as the vice president for sales at Nissan North America. Nissan set U.S. sales records in 2014 and 2015 — admittedly having done so in 2013, prior to Hatami’s reign — before Hatami moved back to Hyundai Motor America.

Recognizing the issues at play upon his return to Hyundai, Hatami ominously told Automotive News, “You’re never going to have everybody completely happy.”

Hatami and Zuchowski worked virtually hand in hand. “We’re on the same page more times than not,” Hatami said.

That page was already rejected by Hyundai HQ in Zuchowski’s case. Now, Derrick Hatami finds out what it’s like to disappoint the Hyundai brass in early 2017.

“Derrick served the company well during his time as head of sales and we wish him nothing but success,” Hyundai told Automotive News.

Hyundai reached out to TTAC Tuesday evening in an attempt to correct the record, stating that Derrick Hatami left the company of his own accord and that the link to Zuchowski’s departure is incorrect.

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars.

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33 Comments on “Hyundai U.S. Sales Vice President Derrick Hatami Is Out, Effective Immediately...”

  • avatar

    VW will soon have more Utility vehicles on sale than Hyundai in North America. Think about that. Not sure why Hyundai has been so slow to adapt in that segment.

    • 0 avatar

      Honda only has 3. Quality over quantity. BMW has already shown us the folly of chasing the niche.

      • 0 avatar

        Honda has more production capacity in building the CR-V than Hyundai does at its Alabama plant (which produces 3 models).

        Hyundai’s struggles has to do with poor product planning and production/capacity planning which goes back to Hyundai’s HQ in Korea.

        The Tucson is on pace for its best ever sales year (1st time hitting the 100k sales mark) due to increased allotment for the US market, but even with combined sales with the Sportage, still pales in comparison to what the Japanese Big 3 do with the CR-V, RAV-4 and Rogue.

        Even tho Hyundai increased production of the current Tucson, they didn’t increase the production enough to meet its demand.

        The Tucson is hitting sales highs not in just the US and Korea, but Canada, Australia and the EU (the Tucson outsells the CR-V in the EU and Australia).

        The Santa Fe is getting up there in age, but sales in the US are still up 21% YTD.

        The problem is that the increase in Tucson and Santa Fe sales haven’t been enough to make-up for the decrease in Hyundai car sales (mainly the Sonata and Accent as Elantra sales are up nearly 18% YTD).

        It remains to be seen if the new Accent and heavy cosmetic changes to the refreshed Sonata can at least slow down the sales downturn of those 2 models.

        In addition to limited capacity/supply of its crossovers, Hyundai brass opted to go with a subcompact crossover 1st for the China and other emerging markets rather than the US, Europe and other mature markets.

        Which was a mistake as the emerging markets auto sales have been harder hit by an economic downturn (also not helped by the Chinese boycott) whereas the mature markets have been seeing a recovery during that time period.

        Another mistake was letting Kia go with the crossover body-style for its hybrid/PHEV/EV while sticking with the liftback body-style.

        As for BMW, BMW has always done pretty well with its higher priced RWD crossovers (X3 nd X5).

        The X3 is outselling the GLC and is on track for a banner year.

        Sales of the X5 are off from its banner year (2015), but still will be among its best sales years – which isn’t bad for a model that is due to be replaced soon.

        The X4 and X6 are niche models and weren’t expected to sell in any significant volume (but higher margins make up for some of that).

        What has been hurting BMW is not having a full-size, 3-row crossover to compete with the GLS – the X7 can’t come soon enough.

  • avatar
    cRacK hEaD aLLeY

    Poor brand value, and they can’t shake it off:

    From my 14 year old gearhead son today commenting on cars on our way to school: Old Hondas and Nissans are cool. The old boxy Nissans are cool. Even old Toyotas sometimes are cool cause you can see they are grandpa kind of cars when they bought them but they look okay for a grandpa car, I guess. The Hoondays just look like they are tired cars after a while don’t you see? And the Kias look like some really really cheap junk I don’t know why. They all look like they belong on a fail meme when they get old. The old Mercedes look so cool now (looking at a 190 E 2.3 with a flat rear tire parked on a driveway)

  • avatar

    It’s not Hatami’s fault, it’s Hyundai’s fault. It’s a love ’em or hate affair with Hyundai’s, and most say they fall apart after 3 years and the dealer doesn’t honor the warranty, especially the latter.

  • avatar

    I’ve been told that the Korean automakers have unrealistic assessments of what is possible in this market.

    • 0 avatar

      they’re also not unlike the Japanese in that it’s far easier for them to tell a Western “fall guy” to take a hike than admit they themselves made mistakes.

    • 0 avatar

      It’s rinse, wash, repeat with Hyundai’s Korean leadership.

      “The beatings will continue until morale improves”….

      • 0 avatar

        You have to admit, Hyundai top brass are giving the BMW, Audi, and MB executives a run for their arrogance. Nobody can tell them what’s working or not – I think that’s what Ronnie’s trying to diplomatically say by calling the know-it-all executives “automakers”.

  • avatar

    If the future Sales VP has to relocate he should probably rent rather than buy based on the amount of turnover in upper management at Hyundai.

  • avatar

    Is it his fault? Hyundai is not the discount brand anymore – it’s Nissan. Nissan seems to be discounting more than the Koreans.

  • avatar

    It’s not hard to figure out. The 2015 Sonata and 2016 Elantra were way more conservative than their predecessors, and pretty much everything else is at the end of their life cycles – Accent came in 2013, Azera in 2012, Veloster in 2012, Santa Fe Sport and Santa Fe in 2013. Meanwhile they offer only 3 crossovers and boring sedans in a market that wants crossovers.

    • 0 avatar

      Actually think the Elantra is doing fine as it is on track to do slightly more than last year’s sales – so holding steady in a market abandoning sedans (would be better for the Elantra if it had more rear passenger room like the Civic and Corolla, but something like that can’t be changed until the next gen model).

      The problem is with the Accent and Sonata.

  • avatar

    This sends the message to all their sales force. Produce or die. Not the place I would like to work at, so let’s see if anyone agrees with me and leaves for friendlier pastures.

  • avatar

    Despite the fact many are somehow blaming Hyundai for this departure and offering advice for the next VP, one important fact seems to be missing: Derrick resigned for another job. You may want to have the full context to the story before responding in the future. We wish Derrick well.

  • avatar
    cimarron typeR

    A buddy of mines sister was a Saturn exec. That ended up leaving for Hyundai for a promotion after Saturn was shuttered.She lasted less than a year as the workplace environment wasn’t friendly to female execs and expectations were unrealistic.I kinda think there’s a supernatural sense of urgency knowing your sworn enemy has missiles pointed at you from a not very long distance.

  • avatar

    Hyundai has my CV right now.

    I can turn their sales trajectory around and grow total unit sales by 5% to 7% YoY for each of the next 5 years, while growing total revenue by at least 3.5% for that same time frame.

    There’s nothing complicated regarding the business model adjustment required to do so.

    They must pay me a minimum of $22,000,000.00 USD in total compensation for each of the next 5 years, however, with a base pay of $8,000,000.00 USD per hear through 2022.

    I must have total authority and decision-making autonomy for global operations, and be able to bring on my own marketing team, design team, and franchise dealership liaison team for North American operations.

    • 0 avatar
      Secret Hi5

      You won

    • 0 avatar

      I’ll do it for half.

      • 0 avatar

        You might regret it at 1/2 the rate I quoted.

        It’s a huge task that will require a massive amount of work, not to mention dealing with shady-a$$ corruption that’s endemic in South Korean politics and the South Korean chaebol families that run the corrupt-as-he!! country.

        Plus, South Korea is a uniquely un-fun place to spend time in, and you’ll probably be spending 25% to 35% of your days there for face time reasons alone.

  • avatar

    So glad you chimed in DW…I was just going to suggest “Buick Man” for the job. However on second thought I think DW might be a better choice.

    Of course I’d be the guy that offered to take GM over from “Red ink Rick”.

    So don’t quit your day job…just yet

  • avatar

    Their stuff is just too expensive for the quality delivered. it still feels, smells and sounds cheap despite being loaded with content.

    They need to shake that habit or drop the price, one of the two.

  • avatar

    He’s just the latest in a long line of Hyundai US sales VPs to be shown the door. That office should have a mini whiteboard on the door, with a dry erase marker, so they don’t have pay for a new nameplate every time someone gets the boot.

  • avatar

    Here’s Peter De Lorenzo’s take over at The Autoextremist, in today’s On The Table:

    “Hyundai. Editor-In-Chief’s Note: As I said in my Autoextremist Brand Image Meter column this week, there’s no use telling Korean auto executives what to do. They know absolutely everything there is to know about absolutely everything. And if you’re an executive in their employ who doesn’t concur with the company line – or excuses – you are jettisoned in favor of someone who will. Hyundai has been careening around like this for years, and there’s no relief in sight. And, as if on cue, Hyundai fired its top sales guy this week, Derrick Hatami. Or he resigned. The ugly reality for Hyundai? The company has lost its mojo in the U.S. market. Remember, Hyundai just jettisoned its U.S. CEO, Dave Zuchowski, last December. According to Automotive News, Hyundai brand sales dropped 18 percent in May, to 58,259 units. That’s also six straight months of sales declines, year over year. For 2017, sales are down 7.5 percent to 283,547 units. Hyundai’s notorious shortsighted thinking is on full display here. They look for quick fixes and fire executives left and right instead of taking a long, hard look at the way they do business. The company makes strategic and product mistakes, then it plays the blame game because, well, you know, it’s never their fault. This just in: Yeah, it is. -PMD”

  • avatar
    SCE to AUX

    “The beatings will continue until morale improves.”

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