U.S. shutdown means slowdown for HyundaiThe prolonged U.S. government shutdown is damaging consumer confidence and may cause new-vehicle sales to fall in October by as much as 10 percent, said John Krafcik, chief executive officer of Hyundai Motor’s U.S. sales unit.
The standoff in Washington that began Oct. 1, leaving some government agencies closed and federal workers furloughed, is generating “anxiety” for many people, said Krafcik.
“It’s that anxiety that keeps potential buyers on the sidelines when making a big purchase like an automobile,” he said. “We’ll probably see the industry off 5 percent to 10 percent this month, compared to September. I think a lot of it has to do with this shutdown discussion.”
Auto sales had been a consistent bright spot for the U.S. economy this year until September, when fewer sales days than usual led to this year’s first decline in deliveries. The final quarter, when carmakers sell the previous year’s models and transition to newer products, tends to be a strong period for sales.
September deliveries slipped 4.2 percent in the first decrease for more than two years, as a quirk in the calendar pushed results of Labor Day promotions into August’s results. Automakers, including General Motors and Ford Motor, said early this month that the government shutdown posed a threat to an already slow economic recovery.
“Industry wide, we’re definitely seeing a slowdown,” Krafcik said.
U.S. Senate Democratic and Republican leaders were working on the details of an agreement late Monday to end the partial government shutdown and raise the debt ceiling before Oct. 17.
Hyundai at the start of the month announced a program to allow federal workers affected by the shutdown to defer loan and lease payments.
“We have already had requests from over 1,000 people to have their payments deferred,” said Krafcik. “That’s a much stronger uptake than we thought. It makes us happy. It means we’re making a difference, but it does give an indication of just how deep and serious the issues are.” Krafcik also mentioned requests from federal workers in a post on Twitter.
Toyota Financial Services, Toyota Motor’s U.S. automotive lending unit, late yesterday said it, too, would provide “relief” on loan and lease payments for federal employees for as long as three months.
“The government shutdown has placed an unanticipated financial strain on many individuals and families,” said Al Smith, group vice president of Toyota Financial Services.