Warren Brown's Car Culture

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By Warren Brown
Sunday, March 29, 2009

LAS VEGAS Casino traffic at the palatial Red Rock Casino Resort Spa here is slow. The usual din of ringing bells and gambler's yells, either in victory over slot machines or in acknowledgment of yet another loss, is next to mute. It is overwhelmed by piped-in pop music, something from Michael Jackson, which oddly makes the place and time feel lonely, ancient.

It is the Wednesday evening of a workweek, and that might be a part of the reason for the relative silence. But the truth is reflected outside the fancy rooms, restaurants and corridors of this hotel, where construction has halted on an adjacent building, where many attractive homes sit empty and where local automobile dealers, like hundreds of their counterparts nationwide, are struggling to keep doors open for elusive customers.

"Sales for our Las Vegas dealers have been absolutely decimated," said John Krafcik, president and chief executive of Hyundai Motor America. He is here for the long-planned North American introduction of Hyundai's Genesis Coupe, a sports car, believe it or not, designed to challenge the best from BMW, Lexus and Mercedes-Benz -- at a considerably lower price.

It is a less celebratory event than Hyundai originally planned. Hamburgers and relatively short test-drives are in. Fancy dinners and theatrical automotive presentations are out. Hyundai, like everyone else, is cutting costs.

But speak to "team members" -- also known as employees -- of the Red Rock, and they will tell that they are happy that Hyundai didn't cancel -- like so many other corporate clients. "At least they showed up," one of them said.

Showing up is winning half the battle, said Frank Maione, owner of the Henderson Hyundai Superstore in nearby Henderson, Nev.

Consumer traffic at Maione's store, one of six Hyundai outlets in the region and 790 in the country, has picked up considerably in the past two months. That's largely in response to a Hyundai marketing program that promises to pay three months' worth of finance notes for customers who have lost jobs within the first year of a new-vehicle purchase.

Under the Hyundai Assurance Plus program, affected customers would not have to repay the three-months of "got-your-back" payments. If they fail to find another job, they can return the vehicle without damaging their credit.

Maione said the program has helped to generate traffic in what still is a dismal market. But traffic is one thing and sales are another, he said.

The program and Hyundai's attractive new vehicle lineup -- the Genesis sedan and coupe, the new Elantra Touring urban wagon -- are getting people to show up, Maione said. "But we need more support from the credit industry to improve our write-to-roll ratio," he said.

"Write," in auto-retail parlance, refers to completing a dealer-consumer contract, selling a new car or truck. "Roll" refers to finance-company approval of that contract, allowing the consumer to "roll" the purchased vehicle off the dealership's lot.

"If we could roll the cars on all the contracts we're writing now, our sales would go up another 20 percent," Maione said. But banks are denying credit on half the contracts written, he said.


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