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Hyundai separation demand has been 'driven by profitability'

Hyundai has requested showroom separation as part of its new dealer contracts, but insists the move has been driven by profitability.

The industry will move to a general block exemption in June 2013 which gives manufacturers the opportunity to change contracts to stipulate separated showrooms.

Tony Whitehorn, Hyundai Motor UK president and chief executive, told AM: “BER is a bit of a red herring because a dealer will do, and a franchise should do, what is right from a business perspective.

“Our most profitable dealers are the larger solus sites.

“We want more exclusivity because it will drive a dealer’s profitability up.”

Hyundai has seen solus representation in its network of 155 dealers go from 35% to 60% in the last three years.

Whitehorn said: “It is a requirement of the franchise but it’s all driven by profitability.

“The new contract starts at the end of July 2013 so it gives them time to be compliant.

“We’ve been talking to all of our dealers along those lines and it seems to be working very well.

“It’s not crazy. We’re not asking for completely separate boxes.

“We’re comfortable with walls or transparent walls, but we do need a separation.”

Hyundai is looking to boost volumes and its market share to 5% to 100,000 units a year.

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