Hyundai CEO John Krafcik told Bloomberg that the ongoing government shutdown will cause new-car sales to fall 10 percent this month. Krafcik said that consumer worry over the nation’s finances, in addition to the large number of furloughed government employees without paychecks, will keep shoppers away from new-car showrooms this month.
“It’s that anxiety that keeps customers, potential buyers, on the sidelines when making a big purchase like an automobile… We’ll probably see the [auto] industry off five to 10 percent this month, compared to where it was in September,” Krafcik told Bloomberg. “Industry-wide, we’re definitely seeing a slowdown in October.”
The federal government partially shut down on October 1, furloughing hundreds of thousands of employees without pay. Earlier this month, Hyundai announced that it would allow furloughed federal workers to defer car payments to help prevent them facing further financial struggles. Krafcik told Bloomberg that more than a thousand owners have already applied to the program, exceeding the company’s expectations. “We’ve got your back and will defer [Hyundai Motor Finance] payments until you’re back at work,” Krafcik wrote on Hyundai’s Twitter feed.
In addition, the program allows government workers to delay car payments for 90 days if they purchase a Hyundai in October. Both Nissan and Toyota have also announced schemes that will let owners defer payments on new cars if they have been affected by the government shutdown.
If new-car sales do tumble as much as Krafcik predicts, it could put a serious dent in Hyundai’s pace this year. Through the end of September, Hyundai U.S. sales are up 1.6 percent compared to the first nine months of 2012.