(Adds comments from Hyundai executive, December U.S. sales)
By Soyoung Kim
DETROIT, Jan 5 (Reuters) - Hyundai Motor Co (005380.KS), whose U.S. sales dropped dramatically in December, has rolled out the first incentive program for U.S. consumers that would allow them to return vehicles if they lose their jobs.
The plan, which applies to only the first year after purchase, comes at a time when industrywide U.S. auto sales remain at their lowest levels in at least two decades under the pressure of tight credit and weak consumer confidence.
Hyundai on Monday reported a 48 percent plunge in U.S. sales for December, the second biggest decline behind Chrysler LLC. For cars alone, Hyundai’s U.S. sales dropped 51.3 percent.
Cars or trucks may also be returned under the program if income is lost due to “certain life altering circumstances” such as bankruptcy, overseas transfer or accidental death.
“The assurance is our attempt to proactively address what we believe is one of the primary contributors to today’s economic woes — a dramatic decline in consumer confidence,” David Zuchowski, Hyundai’s vice president of U.S. sales, told Reuters.
“There is a myriad of very compelling offers in the marketplace today but regardless of how strong the deal is, shoppers are simply not prepared to make a purchase decision if they’re concerned about their job prospects or their ability to make payments,” he said.
The program is designed to reinforce Hyundai’s “value position” in the market and help overcome that uncertainty by providing confidence in the form of a safety net, Zuchowski said.
Any Hyundai customer may return a vehicle within the first 12 months of ownership and walk away from his or her loan obligation — up to $7,500 in “negative equity” — in the event of an loss of income under certain circumstances.
The program took effect this month, after Hyundai’s U.S. sales plunged in December, extending a downturn that hit every major automaker.
Zuchowski said there is no charge for the program, nor would it hurt a customer’s credit rating in the event of a default because the vehicle return would be treated as an early payoff.
Earlier this decade, Hyundai had seen sharp growth in the U.S. market driven by an attention-grabbing 10-year warranty.
That strategy allowed Hyundai to claim the mantle as the fastest-growing major automaker earlier this decade, but it fell short of ambitious U.S. sales targets in 2007 and 2008, hit by the industry-wide slowdown in sales. (Reporting by Soyoung Kim; editing by Richard Chang)