SsangYong UK has issued its first-ever volume targets to franchisees as it targets a more “transparent and professional” relationship with its retail partners, managing director Nick Laird has told AM.
Speaking at the Geneva Motor Show, where the brand launched its new Korando SUV (pictured), Laird said that there was now a desire to drive new standards in the network following a year in which market challenges forced the brand into a position of consolidation.
A dealer council has been established by the brand and Laird is keen to open the lines of communication with retailers, but he is also imposing a little more pressure to deliver volume in 2019.
Laird said: “We are staring to push our dealers a little harder to deliver volume. This year, for the first-time SsangYong UK will be issuing franchisees with volume targets.
“While we do not want to threaten profitability, volume targets are something that we want the dealer body to get used to, along with the idea that there’s money riding on it.”
Laird said that some of SsangYong’s retailers needed a little more pressure to “deal” customers into cars following a year which saw the brand’s registrations decline by 23.3% to 2,754 (2017: 3,590).
While he admitted that 2018 had ended up as a year of consolidation after the SsangYong UK “started the year with Tivoli at 80% diesel mix and far too much stock for the market and ended it with a 75% petrol mix and the right level of stock”, recent survey results had revealed that more could be done to boost sales volumes.
He said: “I was happy and sad in equal measure to find out in the recent What Car? survey that the UK’s least discounted car brand was Porsche and the second was SsangYong.
“I was happy because of what that meant for margins and our residual values, but I was sad because I felt it showed that some of our dealers simply weren’t trading.”
Laird said that average profit margin per unit in the SsangYong network was currently £1,200 on a new vehicle and £1,100 on used.
SsangYong is on a recruitment drive to increase its representation in the UK and Laird said that the brand currently only covers 52% of the UK in geographic terms.
It has a total of 35 open points currently and expects to add 20 new retail points in 2019.
In a bid to boost the growth of the network the brand has grown its ‘representation team’ from one to four and Laird said that the experience among the new recruits means that they could make the transition to become regional business development managers once the network is better established.
This year SsangYong will launch the new Korando SUV in August/September, a long-wheelbase version of its Musso pick-up and a facelifted Tivoli crossover and Laird believes that the flow of new product will boost the morale of his retailers.
Asked whether a value-driven brand importing from outside the EU was in a strong position in a Brexit-affected marketplace, Laird said that currency shifts were of greater concern than the UK’s political relationships with its European partners.
He added: “If we get the balance right in terms of marketing incentives, our relationship with the dealer body and their motivation then we control our own destiny.”