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Dealers dispute HCUK view on bonus terms

A number of Hyundai retailers contacted AM following the publication of our ‘HCUK denies cronyism claim’ story.

We reported that a handful of dealers in Hyundai’s 160-strong network enjoy special terms which allow them to sell cars for less than most other Hyundai dealers have paid for them.

HCUK says all dealers are subject to the same bonus system, and that some dealers simply choose to trade more aggressively than others in order to achieve those bonuses. However, several dealers continue to dispute this.

“We know there are dealers on different terms because they are doing deals on the internet which, even if we achieve maximum bonus, we simply cannot match and hope to stay in business,” one Hyundai franchise holder says.

The standard terms offered to Hyundai dealers comprise: 6% dealer wholesale margin, 3% standards margin, demonstrator/courtesy car support and varying stand-alone and target-related bonus payments.

With the special volume deal – which AM has seen – the dealer signs up to a volume target for the year and forfeits the demonstrator/courtesy, standalone and target-related bonuses. These are replaced by a fixed, per-unit bonus. The amount of the bonus depends on the volume target – the higher the target, the greater the per-unit payment.

Inevitably, dealers who are not on track to hit their target will need to pre-register cars at year end to make sure they receive their bonuses.

Dealers who contacted AM say they understand ‘two-tier’ systems are commonplace in the automotive retail industry.

“Although they are unfair and put the smaller dealer at a distinct disadvantage,” says one, “I can understand why a dealer who is prepared to take the risk and go for volume should expect to buy their cars cheaper. But it would be nice if Hyundai stopped treating us like mugs by denying that a two-tier system exists.”

HCUK was unavailable for comment as AM went to press.

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