General Motors mulling Hyundai’s car-return program

Hyundai Motor Co.’s Assurance Plus program, which allows buyers to return their vehicles without penalty, has largely been credited with preventing Hyundai’s sales from cratering in the worst economic recession in at least two decades.While car and truck sales in the United States are off 39.4 percent so far this year compared to the first two months of 2008, Hyundai’s sales are up 4.9 percent, according to Autodata Corp. That’s prompting other automakers, especially General Motors Corp., to consider offering a similar bring-back-your-car-if-you-lose-your-job deal. GM’s sales are down 51.1 percent this year, more than any other major automaker. Traditional incentives aren’t pushing the sales needle for The General.

Mark LeNeve, GM’s North American vice president of sales and marketing, told analysts and reporters in GM’s monthly sales call on Tuesday that he’s not so sure the Hyundai program is a great deal for Hyundai owners who lose their jobs.”If you lose your job, you need your car,” LeNeve said. “How are you going to find a job if you don’t have a car?”But the genius of the Hyundai vehicle return program is that it helps offset widespread consumer pessimism, which analysts say is the biggest reason people aren’t buying cars and trucks.

No incentive program is likely to send sales soaring to those halcyon days of earlier this decade, when automakers were selling 17 million cars and trucks a year. Sales in February ran at an annual rate of just 9.1 million vehicles, according to Autodata.One reason sales aren’t likely to hit 17 million again for some time is banks and finance companies have undertaken more responsible lending practices. In those days of easy credit, a car buyer could get an auto loan that exceeded the purchase price of the vehicle.Such loans were given so buyers, who owed more on their trade-ins than the vehicles were worth, could pay off the old loans and buy new vehicles.”The days of financing 120 percent of (sticker price) are gone,” LeNeve said.

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Source:http://blog.mlive.com/autoblog/2009/03/general_motors_mulling_hyundai.html

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