'Dealer guy' takes Hyundai helm
Zuchowski succeeds Krafcik amid slowing U.S. sales momentum
Left, Zuchowski: 2014 launches are crucial. Right, Krafcik: Led brand to record sales
LOS ANGELES — It's a new era at Hyundai Motor America.
Last week's appointment of Dave Zuchowski as CEO puts the Korean brand's U.S. arm in the hands of a 33-year auto industry veteran with deep experience on the retail side of the business, at a time in which sales growth is slowing.
Zuchowski, who came to Hyundai as U.S. sales chief in 2007, was previously vice president of sales and field operations at Mazda North American Operations. He began his career in 1980 at Ford Motor Co., where he held numerous executive positions in regional management, product marketing, merchandising and field operations at the Ford and Lincoln-Mercury divisions.
Zuchowski, 55, succeeds John Krafcik, 52, an engineering and product-development specialist and big thinker who steered the Hyundai brand to record U.S. sales and market share over his five-year tenure as CEO. Zuchowski begins the new post Jan. 1.
A Hyundai spokesman declined to say whether Krafcik is retiring or whether he plans to take another job elsewhere. Hyundai said Krafcik's contract with Hyundai expires Dec. 31. It's unclear whether it was Hyundai or Krafcik who chose not to renew it. Krafcik didn't respond to an e-mail seeking comment Friday.
In an interview Friday, Zuchowski credited Krafcik for leading the company through its growth spurt and said he hopes to build on the company's recent successes.
"John was terrific for Hyundai … and those are big shoes for me to fill," Zuchowski said. "We just want to refine things and build and grow."
Zuchowski said Hyundai will post another record sales year in 2013 with volume of around 720,000 vehicles, and expects further growth in 2014. Key to that will be launching redesigned versions of the Sonata mid-sized sedan and Genesis premium sedan in the first half of 2014, he said.
"It's all about product in our business, and we've got some great stories in 2014," Zuchowski said. "My No. 1 priority is making sure we hit the ball out of the park with these product launches."
Fink: "He's a brilliant guy."
Last year, Hyundai sold a record 703,007 units in the United States, compared with 401,742 in 2008, when Krafcik was appointed acting CEO of the U.S. arm.
The start of his tenure coincided with the depths of the 2008-09 recession, when Hyundai was able to lure crowds to its showrooms with eye-catching designs and value pricing that limited the need for incentives. Hyundai also launched a program then to protect car buyers in case of a job loss.
In subsequent years, Krafcik led Hyundai through a product blitz that included the launches of key products such as the current Sonata mid-sized sedan, Elantra compact car and Santa Fe crossover. He also steered the brand upscale with products like the Genesis sedan and the $60,000 Equus luxury sedan.
At the same time, Hyundai's fuel economy claims, a major selling point for the brand, took a hit last year when the company was cited by the EPA for overstating the mpg on several models. Hyundai agreed to settle a class-action lawsuit stemming from the case last week.
With Krafcik at the helm, Hyundai set U.S. sales records in 2010, 2011 and 2012.
But amid the robust recovery in the auto industry this year, Hyundai's momentum has slowed in the face of production constraints and intensifying competition in key segments such as mid-sized cars, compact cars and compact crossovers.
For the first 11 months of this year, Hyundai's market share was 4.6 percent, down from the peak of 5.1 percent in 2011, and Hyundai has had to step up incentives to stay competitive.
Zuchowski said he expects external competitive pressures to continue in 2014.
"Capacity is being added and everybody's getting more aggressive in terms of advertising spends and incentive spend," he said. "I certainly don't think the competitive environment will slack off."
Scott Fink, chairman of Hyundai's dealer council and owner of three Hyundai dealerships in Florida, says Hyundai dealers were "thrilled" to hear of Zuchowski's promotion. Dealers have been generally pleased with Hyundai's consistent approach to incentive spending, which has helped their profit margins, and its hands-off approach to implementing facility improvements.
"He is a dealer guy," Fink said in an interview last week. "He understands the business, he can talk to the dealers, he can talk to the Koreans. He's a brilliant guy."
With Krafcik's departure, Hyundai loses a skilled communicator with deep expertise in product development, design and engineering.
He was the first American engineer to be hired at the General Motors-Toyota NUMMI joint-venture assembly plant in Fremont, Calif.
A New York Yankees fan, Krafcik made his mark on the industry early in his career by coining the term "lean production" to describe the Japanese vehicle assembly philosophy while earning his master's degree at MIT's Sloan School of Management in the 1980s.
In 1990, he joined Ford, where he worked in many product development and engineering positions, including a stint as Ford's chief truck and SUV engineer. He came to Hyundai in 2004 as product development boss.
"I am confident that with Dave's succession, our brand will continue to expand and thrive for years to come," Krafcik said in a statement last week.
Fink said that Krafcik did a "miraculous" job, and that he and Zuchowski worked well as a team.
"He provided great leadership but nothing lasts forever," Fink said. "I think it's a new era and Dave will, and as with any leadership change, help invigorate what's happening at HMA and invigorate the dealers."
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