Hyundai Motor Group, currently the third-largest automaker globally behind Volkswagen and Toyota, is facing allegations from some of its US dealers who claim that the company inflated its sales figures through unethical practices. A new lawsuit filed in Chicago federal court accuses Hyundai of pressuring dealers to manipulate inventory codes meant for “loaner” vehicles to artificially boost sales numbers.
Allegations and Details
The lawsuit claims that Hyundai encouraged certain dealers to misuse these inventory codes, making it appear as if the vehicles were sold. When it came time to actually sell the vehicles, the dealers would rescind the coding. This practice allegedly allowed Hyundai to report higher sales figures both internally and externally.
Dealers who participated in this scheme reportedly received various rewards from Hyundai, such as purchasing vehicles at a lower overall cost, better allocation of new vehicles, and bonus cash incentives. These incentives provided a significant advantage to those dealers over their competitors.
Evidence and Recorded Call
One of the key pieces of evidence cited in the lawsuit is a recorded phone call involving a district sales manager. The manager reportedly stated, “Desperate times call for desperate measure, we gotta hit a number for the press and for the Koreans.” This statement suggests that the pressure to inflate sales figures came from high levels within the company. The manager also allegedly suggested that electric vehicles (EVs) were suitable candidates for this scheme due to the appropriateness of the loaner code for them.
Background and Previous Cases
The dealers involved in this lawsuit are part of the Napleton Aurora Imports group. This group has previously won a settlement against Chrysler after filing a similar lawsuit in 2019, where they accused Chrysler of inflating sales figures.
Implications
If the allegations are proven true, this case could have significant implications for Hyundai’s reputation and its relationships with its dealers. It also raises questions about the integrity of reported sales figures and the competitive practices within the automotive industry.
Current Status
As of now, these allegations remain unproven, and the case is still pending in court. Hyundai has not publicly responded to these specific allegations, but the lawsuit highlights the ongoing issues and tensions between automakers and their dealer networks.
The lawsuit against Hyundai underscores the importance of transparency and ethical practices in the automotive industry. As the case unfolds, it will be crucial to monitor the developments and understand the broader impact on Hyundai and its dealer relationships.
