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Manufacturer insight: Hyundai

AM: Other manufacturers have pushed for a 5% market share, but volumes have fallen away and they’ve been left with large and costly facilities. How can you guarantee that won’t happen?

TW: We have learnt from other manufacturers. The investment we’re asking for is not cost penal in comparison to many manufacturers. We have tried to facilitate it, including interest free loans for showroom identity.

If you looked at the retail concept for an average dealer, essentially it’s only £40,000-£50,000 for the showroom.

Showroom requirements have gone from 150sq metres to 200sq metres so it’s not ridiculous. Most of our dealers are already there.

AM: How will the new block exemption regulations change demands on the network and what’s your stance on inter-franchise competition with shared facilities?

TW: 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 your profitability up. Our number of solus dealers has gone up in the last three years from 35% to just under 60%.

It is a requirement of the franchise, but it’s all driven by profitability. The new contracts start at the end of July 2013 so it gives them time to be compliant.

We’ve been talking to 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.

AM: What’s the average return on sales for the network?

TW: It’s around 1.3% return on sales on average in what was quite a tough year. It very much depends on what the market does which will determine whether that will go up this year.

I can’t change the market, but I can give the dealers better opportunities when it’s tough.

AM: What was the biggest improvement in the network over the last year?

TW: It’s been the realisation of the corporate market. Many manufacturers will say to dealers that they have to get into fleet and support them with money and dealers can still end up being reluctant partners.

Our dealer network has taken on corporate specialist staff off their own back, without us specifically asking.

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