Revenge of the Nerds: Kia, Hyundai, Subaru Gain in U.S.

It’s tempting to say that conspicuous consumption is out, but based on my experience in the early 1990s, it’s just going to lie low for a while.

One month of sales does not a trend make, but U.S. auto sales in January looked like “Revenge of the Nerds.” Nearly all of the sexy, powerful brands fell on their faces, while Hyundai, Kia, Smart and Subaru posted year-over-year sales increases.

Luxury brands were among the hardest-hit in January: Mercedes-Benz dropped 43 percent from the year-ago month; Lexus, down 28 percent; BMW, down 16 percent, according to AutoData Corp. U.S. sales for Bentley fell 75 percent in January; Lamborghini, down 66 percent; Ferrari, down 52 percent, AutoData said. At a microscopic volume, Jaguar was an exception to the rule, thanks to the XF model, which wasn’t on sale a year ago.

For sure, the national mood has turned on high-paid CEOs with private jets, at least one infamous million-dollar office renovation, and high-end luxury cars.

Once people had a chance to think about it, government bailouts for banks, and to a lesser extent the auto industry, set off a “Far Side” cartoon mob armed with torches and pitchforks. President Obama fueled the fire with limits on executive compensation for bailed-out companies, plus a public scolding.  

Meanwhile, Hyundai insists that its “Hyundai Assurance Program” was a hit in January. Hyundai’s U.S. sales gained 14 percent from the year-ago month, while the entire U.S. market fell  37 percent. The Hyundai Assurance Program allows a buyer to turn in their car and walk away, if they lose their job within a year of purchase.

In a recent blog, I said that reminding people they could lose their jobs might scare away more people than it attracts, but Peter DiPersia, Hyundai’s Eastern Region general manager, said in a written statement that consumers have embraced the idea. “This program gets to the root cause of today’s economic concerns – fear of job loss – and shows consumers we have faith in them, and faith in our economy,” he said.

It also helps that Hyundai is running a lot of advertising. In addition, Hyundai sales were down 23 percent in the year-ago month, while sales for the entire U.S. industry were down only 4.3 percent. That makes for an easier year-over-year comparison for Hyundai. Still, an increase is an increase, and Hyundai’s January performance was a lot better than most.

U.S. sales for Hyundai’s sister division, Kia, were up 3.5 percent, to 22,096. Subaru, which was nearly alone in posting higher sales in 2008, was up 8 percent to 12,194.