When the coronavirus pandemic struck the U.S. late last winter the auto industry took a major blow, sales tumbling more than 40% in April. Industry planners and analysts feared the market could plunge to even lower depths than what were seen during the Great Recession. But, unexpectedly, demand began rebounding by mid-year and has continued climbing.
While 2021 is still officially forecast to fall well short of pre-pandemic levels, Randy Parker is seeing strong signs the market could see an even more solid recovery, especially as fleet buyers are coming back, including the daily rental companies devastated by the pandemic’s collapse of business and leisure travel.
Parker has several good reasons to be upbeat. He was this week named Hyundai Motor America’s new senior vice president of sales – just in time to report that the South Korean carmaker set an all-time record for U.S. retail sales. He spoke to us by phone from California.
TheDetroitBureau: U.S. auto sales really came in strong last month, but Hyundai’s record retail demand clearly stands out. What does that say for you folks, and for the market, overall?
Randy Parker: When you look at our product portfolio … it’s the best it’s been in a very long time. Full stop. It’s really resonating with consumers. In addition, our marketing and our advertising has been spot on. We were able to get on the air with (the win for the Hyundai Elantra as) North American Car of the Year very quickly. I think that helped in January.
TDB: What about the industry as a whole? Sales last year were supposed to come in at least a million vehicles lower than they did. And the new year is starting off even stronger.
Parker: I think there’s a lot of pent-up demand that’s out there and the momentum we had in December rolled right into January, which is rare. You typically see a little bit of a drop off. Despite all the bad news regarding COVID, I think consumers are ready to come back to market, cautiously. We’re starting to feel like people are ready to get back to some level of normalcy. I hope that trend continues.
TDB: I also sense that. And automobiles, especially buying a new one, can help provide a sense of normalcy, a feeling of getting a reward. And you can get that feeling, even if you’re social distancing.
Parker: Yeah, you know that brings me back to my childhood. I grew up in modest surroundings, but anytime my dad could get a new car parked in the driveway it was a way of saying he’s done something right. And, at this point, purchasing a car is one way to get back to some level of normalcy.
TDB: So, are you seeing signs that suggest that 2021 could see a faster rebound than has been expected, much like what happened in 2020?
Parker: One of the things we look at is the fleet companies. (ED: fleet demand collapsed last year, many daily rental firms, in particular, halting vehicle purchases entirely.) The fleet companies are starting to raise their hands again and want production. So, what that tells me is that people want to get into a vehicle as they are traveling a little bit more. They need a rental car and the companies are knocking down our door, sending a very positive signal.
TDB: Cox Automotive recently forecast 2021 sales will rise 9%, to 15.7 million – but that would still be well short of the 17.1 million vehicles sold in the U.S. in 2019. Are you ready to raise Hyundai’s industry forecast for this year?
Parker: I would say, right now, it’s a bit too early to forecast. So, let me just say we are cautiously optimistic about 2021. If things continue the right way, they roll out the vaccine and people get inoculated to the point of herd immunity, it will help the American consumer feel better about life. And that gives us a sense of hope; we’re very, very cautiously optimistic. The good news for Hyundai is that we’ve got some great products for when the market does rebound.
TDB: What about inventory shortages following last spring’s factory closures? There are about a third fewer vehicles in U.S. dealer inventories than normal for this time of year, and I know there’s a very short supply of the hot Hyundai Palisade SUV.
Parker: Our inventory is pretty good, pretty steady. You can always use more of a hot product like Palisade, but there’s a fine line between having one or two too many and one or two too few. I’d like to be on the thin side. Our plant in Alabama is running at full capacity and we’re going to be launching the new Tucson and Santa Cruz there, something we look forward to.
TDB: So, overall, 2021 is looking good, and we could see a faster rebound on both the retail and fleet side?
Parker: Yeah, I’m cautiously optimistic, I’m hopeful that 2021 has the potential to be a very solid year. Barring anything else that comes out of left field, it’s off to a good start and we just have to keep it going.