John Krafcik eyes Sonata, talks about his new role

Thu, 17 Apr 2014

As hundreds of people gathered to watch the unveiling of the 2015 Hyundai Sonata at the New York Auto Show on Wednesday, John Krafcik, a driving force behind the new vehicle, found himself in a peculiar position.

He stood far away from the car, away from the crowd. He watched from the Nissan stand as the covers were pulled off the Sonata.

If it was an awkward moment for Krafcik, whose tenure as Hyundai's chief executive officer ended on January 1, he didn't show it. He offered effusive praise of the Sonata. "It's a beautiful car," he said. "I think it's wonderful."

After his contract expired at the end of December, Krafcik, who led Hyundai's ascension as a key competitor in the American auto industry, quickly moved to his next challenge. Earlier this month, Krafcik joined the board of directors at TrueCar, the car-shopping website that is preparing for its initial public offering, which is expected later this year.

Per Securities and Exchange Commission regulations, he couldn't talk about the upcoming IPO. But the always-exuberant executive was upbeat about his new gig and the auto industry in general as he paced the show floor Wednesday.

There was no doubt he liked the new Sonata. But he also liked its competition in the midsize sedan market. Toyota unveiled a refreshed Camry that arrives only two years into its lifecycle. "It's an extraordinary midcycle redesign, and they did it well," he said.

Almost every competitive model in the midsize sedan segment has undergone a significant facelift within the past two years as the competition has tightened and the overall market improved. The Camry remains the best-selling sedan in America. More than 94,283 have been sold so far in 2014. But the Honda Accord, Mazda6, Ford Fusion – and even the once-lowly Chrysler 200 – have undergone changes that include more expressive designs.

"Anything that reduces friction for consumers and dealers in the car-buying process is great." – John Krafcik

"It is fascinating to see how design has become a currency in the midsize segment," Krafcik said. "Here's the beauty of it: design is free. It costs just as much to stamp a body panel that is ugly as it does to stamp one that looks good."

On paper, he says consumer-focus groups typically rank design far behind safety, fuel economy and practical considerations when they're choosing a new car. But when they actually see the cars and compare them, "the hottest-looking car wins."

In his new role, he's shaping the car-buying process as much as he shaped innovative car-buying initiatives in his old post, like Hyundai Assurance, a program that included provisions for customer job loss during the recession. Car dealers have long complained that TrueCar's real-time pricing methods hurt their profits, and his toughest job might be convincing them that à la carte pricing might just benefit them.

"As opposed to pricing with a broad brush, they can adjust it for every trim level, every upgrade on each model," he said. "They can adjust their pricing as fine as a grain of sand ... Anything that reduces friction for consumers and dealers in the car-buying process is great, and we're hard at work applying that to our business."

By Pete Bigelow