Hyundai Gauges Risk of Widening Scope of Subscription Model

Marcelo Brutti, chief risk officer for Hyundai Capital America, does a fireside chat at AFPCS18.

DALLAS —Hyundai Capital America’s Chief Risk Officer Marcelo Brutti detailed the risk analysis that went into the launch of the captive’s electric vehicle subscription program and the adjustments made last month.

“We don’t know what the future looks like, but we know subscriptions could be one of the solutions,” Brutti told attendees at the Auto Finance Perfomance & Compliance Summit. “So we want to get experience out there, we want to see how the market reacts, we want to put it out as a potential product.”

Last month, Hyundai quietly raised prices on the Ioniq Unlimited+ subscription program, which offers an all-in-one monthly price for lease payments, maintenance, and insurance. Unlike other programs, there’s no ability to swap out vehicles. Yet the 36-month lease term required by Ioniq Unlimited+ helps the program to be one of the cheaper subscription options, starting at $275 per month.

The program is only live in California, and the funding, securitization, and strategic risks are still to be evaluated for a larger release, Brutti said.

“You have to identify all of those risks before you actually decide to launch a new product,” he said. “Even after you do all that, you have to decide whether you actually want to do it. What are the implications if you do it? And what are the implications if you don’t do it?”

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As Assistant Editor at Auto Finance News, William specializes in covering compliance, operations, and subprime issues. As a Brooklyn implant by way of Ohio, he's happy to discuss the triumphs and pitfalls of Cleveland sports as well as the latest music trends. Former bylines include Candy & Snack Today, Inverse, and The Tennessean.

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