Krafcik wants more TLC for Hyundai customers

DETROIT -- With sales growth in 2012 expected to be limited by production constraints, Hyundai's U.S. boss says "delighting" the customer will be the brand's focus this year.

Hyundai is rolling out to all its exclusive U.S. dealerships a sales training program that initially was developed only for dealers selling Hyundai's top-of-the-line cars. The program, called the Hyundai Priority Experience, is intended to improve the retail experience for all Hyundai shoppers, not just those shopping for the brand's premium products, Hyundai Motor America CEO John Krafcik said in an interview during the Automotive News World Congress.

The program is the key component of Hyundai's overarching goal for 2012 of improving quality and customer satisfaction, Krafcik, 50, said.

Vehicle quality slid in the J.D. Power and Associates Initial Quality Study to No. 11, and below the industry average, in 2011, from No. 7, and above the industry average, in 2010. Customer satisfaction with the Hyundai retail experience also took a hit, falling to No. 15 among mainstream brands in J.D. Power's Sales Satisfaction Index in 2011, from No. 7 in 2010.

"Volume is going to be an outcome of the quality of our efforts in that area and how well we can optimize around our production constraints," Krafcik said.

"We're planting seeds this year for future growth."

Hyundai outperformed the industry for the fourth consecutive year in 2011, boosting U.S. sales 20 percent to 645,691 units, compared with the total industry's 10 percent gain.

In a World Congress keynote speech, Krafcik said Hyundai is changing from a "value" brand into a "valuable" brand.

Consumers were willing to pay 96 percent of a Hyundai vehicle's sticker price in 2011, up from 86 percent in 2009, Krafcik said.

Hyundai has raised transaction prices 14 percent since 2009 but has maintained a strong reputation for value, he said.

Hyundai also has cut vehicle rebates to just 18 percent of its incentive spending in 2011, down significantly from just three years ago.

"The orthodoxy inside the company just three or four years ago was, seriously, 'We can't sell a car without a rebate on the hood,'" Krafcik said. He noted that it has taken Hyundai 25 years of sell- ing vehicles in the United States to gain a market share of 5.1 percent.

"That's not an overnight success," Krafcik said.

"We have an awful lot of way to go. We're still a relatively small player in the U.S. market but, honestly, we have big ambitions."