When Hyundai's dealers gather Sunday for the brand's make meeting, they'll come armed with a list of concerns related to the Korean brand's current state in the marketplace.
Not having a CEO in place won't be one of them.
Hyundai Motor America chief Dave Zuchowski, despite his popularity among dealers, was unceremoniously shown the door in December for failing to meet performance objectives. Jerry Flannery, Hyundai Motor America's general counsel, is serving as interim CEO while the automaker looks for Zuchowski's successor.
Having Flannery at the helm sits just fine with dealers, according to Andrew DiFeo, Hyundai National Dealer Council chairman and general manager at Hyundai of St. Augustine in St. Augustine, Fla. The brand's retailers are focused on more pressing matters.
High on the list is securing regular and competitive incentives from Hyundai to keep pace with the rest of the industry, plus increased support from Hyundai Motor Finance on new and certified used cars.
Then there's the issue of Hyundai's car-truck mix. In 2016, about 70 percent of the brand's U.S. sales were cars, compared with an industry average of nearly 40 percent. Even with adjustments to its production in 2017, Hyundai is still looking at 60 percent car sales for the year, DiFeo said. It's not until 2018, when Hyundai begins to reshuffle its crossover lineup, that a meaningful shift will occur.
This will leave Hyundai's dealers and its next U.S. CEO in the lurch as they struggle to reconcile Hyundai's ambitious sales and market share goals with a portfolio that is not as tuned to consumer demand as its rivals' portfolios are. So far, Hyundai has been leaning heavily on incentives and fleet sales to pick up the slack.
The mixed-up mix has eaten into profits, another key concern on dealers' minds. Dealer profits were down in 2016, though the production adjustments should help them climb out of the trough for 2017.
It's not just dealers feeling the impact. Parent company Hyundai Motor Co. this week reported a 39 percent decline in net profit for the latest quarter, in part because of heavy incentives on the small sedans that dominate its U.S. lineup.
Hyundai's emerging Genesis luxury brand will be another talking point. Right now there are 351 dealers selling Genesis products, a number Genesis General Manager Erwin Raphael described to Automotive News this week as "significantly more than would be ideal."
Hyundai brass will have to find ways to talk some dealers out of selling the Genesis brand. Those that stay, meanwhile, face the challenge of costs related to training and ancillary products at a time when they have only two models to sell -- both sedans.