The Pressure's On: Hyundai Motor America's Newly Minted CEO Needs to Turn It Around

Steph Willems
by Steph Willems
the pressures on hyundai motor americas newly minted ceo needs to turn it around

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

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  • El scotto El scotto on Sep 17, 2017

    Yeah, Hyundai/Kia has conquest sales. Other people didn't buy them because of "bought by the credit-impaired" or the "thrifty" Some in those two somewhat negative categories talked up their "sizzling good deal" or "it was so much cheaper than the Japanese one". Throw in some adversarial customer support and salespeople leaving oil slicks of sleaziness in their wakes and you have some problems. So these people bought a Hyundai/Kia; H/K's conquest sales are people buying a second one.

  • JohnTaurus JohnTaurus on Sep 17, 2017

    Aside from doing more to improve long-term reliability, and to actually honor their damn warranty, I think Hyundai could diversify their lineup here by introducing the commercial van they sell elsewhere. Mercedes-Benz and Nissan have found the commercial van segment in this country viable enough to submit entries. Why not Hyundai? Is it worse than dumping their sedans into rental fleets? They have an American manufacturing presence, the plant in Alabama could be expanded to build it for this market. While they're at it, they could design and build a traditional-style truck off the same platform (perhaps to coincide with the next generation of the van?), something to complement their upcoming crossover-style truck as a heavier duty alternative. If that platform wouldn't support it, maybe base it off the platform that underpins their Porter truck? I doubt the forward-control style Porter would pass North American safety standards as it is, but again, this could be rectified with designing the next-generation of this vehicle with those standards in mind (as well as supporting a non-COE type truck that would likely sell much better here). On another note, I also could see them getting back with Chrysler (now FCA), since Sergio seems so intent in partnering up with another automaker. They still sell products elsewhere badged as Dodges, the Accent in Mexico, and that van I showed above is also sold as a RAM. Why couldn't the next-gen 300/Charger share a platform with the Genesis large sedan (G90 I think it is)? The Giulia platform could still be used for a smaller RWD Dodge or Chrysler. It would seem both companies have a lot to offer each other, with platform sharing of their FWD cars as well. This wouldn't necessarily impact Hyundai brand sales here in the U.S. per say, but it could give them more channels with which to sell their increasingly less popular cars. Rebadging the Elantra to become an FCA compact to replace Dart (and the Tipo/Neon elsewhere), for example, could help keep the factory running and help justify development of future generations. Just a few ideas. Perhaps they've already studied them in some form, and decided against them for whatever reasons, but as I said, just a few ideas I had.

    • El scotto El scotto on Sep 17, 2017

      oh!Oh!Oh! Have H/K merge with Chrysler. Butt-ugly, ill handling small cars and SUVs/Cuvs with bad engines and/or transmissions. A true chance to be a turd harpooner in an ocean of craptastic vehicles. John might have Sergio pull the trigger on a deal like that. Jeep would be the tethered goat H/K couldn't resist. Or Chrysler may be (probably) sold to the Chinese.

  • Cprescott I remember when Fords were affordable.
  • Cprescott As a once very LOYAL FORD buyer, I had to replace my 22 year old Ford (bought new in 1997) once it finally started to have problems at 180k miles. I would have gladly purchased something like this from Ford but they abandoned me as a car buyer. Oddly, Hyundai still builds cars in a variety of flavors so I became a customer of theirs and am very happy. Likely will consider another once this one gets up in mileage.
  • SCE to AUX A friend once struck a mounted tire that was laying flat in the middle of her lane on the PA Turnpike. She was in a low late-90s Grand Prix, and the impact destroyed the facia, core support, radiators, oil pan, transmission, subframe, and suspension. They fixed it all.
  • Dukeisduke Lol, it's not exactly a Chevrolet SS with Holden badging.
  • Dukeisduke Years ago, I was driving southbound along North Central Expressway (south of Mockingbird Lane, for locals), and watched a tire and wheel fall out of the bed of a pickup (no tailgate), bounce along, then centerpunch the front end of a Honda Accord. It wasn't pretty.