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HCUK denies ‘cronyism’ claim

Unrest among Hyundai Cars UK’s dealers has led a number of retailers to accuse the manufacturer of fostering a “dog-eat-dog” atmosphere within its network.

Concerned private dealers have accused the head office of “cronyism” in offering cut price deals to a select half-dozen members of its network, which they claim, allows them to retail models such as the Getz, Accent and Coupe for less than many other dealers pay Hyundai UK for the same stock.

And faced with “impossible” increases in sales targets this year, dealers accuse sales director John Lawrence of preferring the stick to the carrot when urging dealers to reach their goals, which in some instances are to achieve 160% of last year’s sales.

“It’s destroying what was a very good and profitable franchise,” one Hyundai dealer told AM. “Very few dealers this year will be able to say they have profited from selling its new cars.”

But he concedes: “We do make money from the nearly new and used cars, though.”

Another dealer says he has had long-time customers tell him they have seen significantly cheaper prices on other dealerships’ websites and accuse him of ripping them off. “A level playing field – that’s what it’s about,” he adds.

Ironically the Government’s New Car Supply Order 2000 was designed to level the playing field so groups buying in bulk could get the same discounts as fleets.

A third Hyundai retailer, who has represented the manufacturer for a long period, says he is now considering quitting the franchise in favour of an independent used car operation.

“I’m not aware of other franchises which have quite the same ‘dog-eat-dog’ situation that’s come about with Hyundai,” he says.

Hyundai UK says all dealers are subject to the same bonus system, and some may choose to “trade more aggressively” than others in order to achieve those bonuses.

“This is about dealerships having ownership of how they choose to trade,” says sales director John Lawrence. “The latest action taken with our special edition Getz at £5,999 demonstrates that we allow all dealers to trade at competitive prices in what has been a competitive marketplace.”

  • Thanks to Dealerforum.com for its contribution to this story
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