In part one of our interview with John Krafcik, newly-appointed Acting President and CEO of Hyundai America, John discusses Hyundai's future strategy and future product plans, including performance models, and why Hyundai won't enter the pickup truck market.
AARON GOLD: This is Aaron Gold from About.com Cars, and I'm sitting down with John Krafcik, Acting President and CEO of Hyundai Motor America.
JOHN KRAFCIK: Hi, Aaron, and welcome to Fountain Valley.
AG: First question: What are you driving?
JOHN KRAFCIK: You know that my last three cars were Accent SEs. I love the 1.6 liter scrappiness and the wonderful chassis, which we spent a lot of time working on. I still think it's one of the hidden gems in the auto industry from a fun-to-drive-per-dollar standpoint. But with the new job, and with the program we have internal to the company to cycle through some of the pre-production Genesis models, I'm now driving one of those. It's a Genesis V8, black, which wouldn't have been my favorite color but we had limited selection.
AG: I saw a row of them out in the executive parking spots. I was looking for the Accent, but I guess it wouldn't look good to have the president and CEO driving around in a $15,000 car.
JOHN KRAFCIK: I think it would look fantastic! (laughs) And I can't wait to get back into an Accent. My wife's driving a 2009 Sonata Limited with the four-cylinder, and she's loving it. And I think you're going to see more and more of them in the mid-size world.
AG: Your past posting was VP of Product Planning...how has this changed things, having a "product guy" in [the CEO] position?
JOHN KRAFCIK: Often in our industry folks in this position don't have a strong product background. I think what works about Hyundai and our executive team is we have an incredible assortment of talent. Joel Ewanick on the marketing side, who was the father of the Hyundai Assurance program; Dave Zuchowski, our Vice President of sales, I'm convinced is the best sales executive in the industry, in any company, bar none; Frank Ferrara in parts and service. So, we're just a team that works really well, and I just happen to have some product experience.
AG: The sense that I get is [that] a key part of Hyundai's recent success has been letting American executives make the decisions about where the company goes. Is that an accurate assessment? How much of the product strategy has been coming from America, how much is coming from Korea?
JOHN KRAFCIK: I would say we're working to get to the right balance...we've just been here 22 years, Aaron, when you think about it, [a] short period of time. So the initial thoughts on product entry were kind of born in Korea, and with time, we've grown the capability of the American staff, both from a product planning standpoint, from an engineering standpoint, in Michigan first and now in California, with design. So, yeah, I think the influence is growing, and we've reached a really nice balance. We have terrific discussions here, in California and in Michigan, and we have terrific discussions as well in Korea, where we make some of the decisions for the future products.
AG: One of the things I've noticed, obviously you guys have [introduced] all new products in the past, what, three years, now that Tiburon's gone? I think everything's --
JOHN KRAFCIK: Everything is fresh, the oldest thing in the lineup is the Tucson.
AG: That's from 2005, correct?
JOHN KRAFCIK: Yes.
AG: It seems the higher-end product are really strong... products like the Genesis, Azera, Santa Fe, Veracruz. [But] the latest iterations of the Accent and the Elantra are not so strong. The Accent's really kind of getting beat up on value-for-money versus the [Nissan] Versa and the [Honda] Fit and the Suzuki SX4, and the Elantra is a very nice car but a little bit bland. Is this a shift in focus for Hyundai away from smaller, more inexpensive products, or is it just kind of an oversight, and yes, those products could be better?
JOHN KRAFCIK: I think reasonable people can have reasonable disagreements about relative virtues of cars, but I'd say, cars like, I mean, in particular the Elantra, it is Consumer Reports' top pick for a compact car, and we think it's absolutely the best compact car you can buy for the money. We're really proud about Accent. You know I'm a big Accent booster and fan myself. I continue to think of the Accent as kind of an undiscovered gem, in the same way that Azera is, but in a very different market segment. I think Accent deserves a lot more praise than it's been getting because I think for the most part people aren't so aware of it. But no, to get back to your original question, we are definitely not moving away from our entry-level products, and we really can't, when you think about it. We've made some pretty bold pronouncements, Aaron, about what we're going to be, say, in 2015. By 2015 we'll be the number one fuel-economy brand in the US. That's our stated goal. We're #3 right now.
AG: You're going to meet 35 MPG CAFE [Corporate Average Fuel Economy] a couple of years early, correct?
JOHN KRAFCIK: Five years, more than a couple. Five years early... And to do that, we have to have a tremendous focus on the low-end, more affordable cars and smaller powertrains than what you're seeing now in the industry.
AG: So, you're saying [that] the advances that we've seen in the Genesis, we can expect to see in future Accents and Elantras?