Hyundai holds firm against COVID-19

LOS ANGELES — Hyundai Motor America was quick out of the gate when the coronavirus pandemic hit in March, rolling out sales promotions, bolstering dealer cash flow and setting retail sales records as fleet fell off a cliff.

But the automaker's optimism waned last month as COVID-19 surged across the U.S.

"The first 10 days of the month were quite brisk," said Randy Parker, Hyundai brand's vice president of national sales. "But then, in the third week, things started to slow down. COVID was starting to raise its ugly head, hospitalizations were going up, and we were really concerned going into Black Friday weekend."

It was a reminder, Parker told Automotive News, that the industry is still living in uncertain times, despite months of strong sales. Hyundai dealers and customers have shown resilience by adjusting to online transactions and home delivery. And auto plants have remained open during virus ups and downs. But the future is hard to predict now.

In the final tally, the month's results weren't so bad. Complicated by a tough year-over-year comparison due to November 2020 having three fewer selling days than November 2019, Hyundai brand sales were down 9 percent. But deliveries on a daily selling rate basis were up slightly, and fleet sales improved.

"The headline numbers don't look so great," Parker said. "But when you adjust for the number of selling days, the one less weekend, we're very pleased."

Nearly 20 percent of all of Hyundai's November retail sales were reported from the final weekend.

"We had a strong close," he added.

Jessica Caldwell, executive director of insights at Edmunds, said November generally turned out to be a weak spot as consumers pulled back in the wake of the COVID-19 surge.

"November sales were already set up to take a hit due to fewer selling days, but the second wave of the virus only depressed sales further as stricter quarantine orders were reintroduced across the country and Americans put their purchases on hold," Caldwell said in an email.

"December, however, is shaping up to be a stronger month: the inventory situation is looking better than it did just a few months ago, fleet sales are trickling back into the market, and interest rates continue to be low," Caldwell said.

Dealers are also now more adept at online sales, which should help with a busy year-end close.

Parker noted that Hyundai's online transactions now account for nearly 10 percent of retail sales, which is a major milestone.

"Almost 10 percent online retailing was virtually unheard of a year ago," he said. "I think consumers are going to continue to behave that way even after COVID because it's convenient for them."

Parker shares at least some of the optimism coming from industry analysts.

"COVID is still out there running rampant," he noted. "We're going to have to stay very vigilant; we're going to have to make sure we keep our dealers and customers safe. But all the things that we did at the beginning of the pandemic, we're going to lean on in December to help us close out the year."

He predicted that, with COVID vaccines expected to roll out to the public in the coming months, the industry could return to something like normality by summer.

"There's light at the end of the tunnel in terms of the vaccines," he said. "I think we're still going to have to remain vigilant for another six months."

Hyundai, which attributes much of its current retail strength to a slew of new and updated products, is moving forward with plans to launch a new-generation Tucson crossover next year and its first electric compact crossover on a new modular platform. The Ioniq 5 will be the first product for the new Ioniq subbrand of full-electric vehicles.

"If we can launch product in 2020," Parker said, looking back at the unexpected challenges of the last nine months, "we can certainly launch product in 2021."