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Old 02-17-2012, 06:40 PM   #1
XDCX
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Default Top Factory Issues for Hyundai and KIA Dealers - CY 2012

The purpose of this thread will be to identify the top issues the Hyundai and KIA dealers have with the Factory in Calendar Year 2012 and then review what progress was made toward resolving those issues by year's end.

This thread will remain in the open section of DealershipForum and the second post of this thread will be updated with the latest issues identified by our members. A separate thread discussing the ranking of these issues will be created in AREA 51 if needed.
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Old 02-17-2012, 07:40 PM   #2
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Default Listing of the Top Issues with the Factory

This post will be updated with the top issues the Hyundai and KIA dealers have with the Factory as identified by our members. The ranking of the Top Issues will also be based on the input provided by our members.
  1. How about an increased corporate ad budget for Azera since it is going up $6K in price?
  2. How about increased inventory of the low end Kia Rio and Forte models?
  3. How about some increased dollar percentages for KMA/HMA contributions to local DAA regional advertising groups?
  4. I like the idea of branding the upscale cars Genesis, but is it going to happen for sure?
  5. KMA/HMA how about a "goodwill" increase in warranty labor rate, since all we are doing is selling maintenance in the service drive.
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Old 02-20-2012, 06:07 AM   #3
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How about an increased corporate ad budget for Azera since it is going up $6K in price?

How about increased inventory of the low end Kia Rio and Forte models?

How about some increased dollar percentages for KMA/HMA contributions to local DAA regional advertising groups?

I like the idea of branding the upscale cars Genesis, but is it going to happen for sure?


Hey it is all good, but how can it get even better?
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Old 02-20-2012, 01:04 PM   #4
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Quote:
Originally Posted by rd3311 View Post
How about an increased corporate ad budget for Azera since it is going up $6K in price?
I had never even heard of the Hyundai Azera - I had to Google it. That said, increased ad dollars to launch the vehicle would definitely be a good idea.

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How about increased inventory of the low end Kia Rio and Forte models?
Is this a mix issue? Are the lower level trim packages on restriction but the factory will build more expensive vehicles?

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Originally Posted by rd3311 View Post
I like the idea of branding the upscale cars Genesis, but is it going to happen for sure?
Wow, I hadn't heard the idea of using Genesis as the basis for a separate brand, Frankly I think it's a great idea. I love the styling of the Genesis sedan and coupe and I've often wondered how many sales Hyundai has lost because customers don't want to own an "entry level" brand car.

That said, would all Hyundai dealers get access to the Genesis vehicles or would it be a separte franchise only awarded to select dealers?
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Old 02-21-2012, 05:39 AM   #5
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Quote:
How about increased inventory of the low end Kia Rio and Forte models?

Is this a mix issue? Are the lower level trim packages on restriction but the factory will build more expensive vehicles?
The supply numbers for any of these models are tight, it does not matter whether 2 or 4 door, stripped or loaded. The product just moves. We also need more Optimas.

Quote:
I like the idea of branding the upscale cars Genesis, but is it going to happen for sure?

Wow, I hadn't heard the idea of using Genesis as the basis for a separate brand, Frankly I think it's a great idea. I love the styling of the Genesis sedan and coupe and I've often wondered how many sales Hyundai has lost because customers don't want to own an "entry level" brand car.

That said, would all Hyundai dealers get access to the Genesis vehicles or would it be a separte franchise only awarded to select dealers?
HMA Dealer council has said no seperate franchise, buildings etc, only dedicated space inside your existing showroom and service facilities. HMA agrees, no decision yet.

KMA/HMA how about a "goodwill" increase in warranty labor rate, since all we are doing is selling maintenance in the service drive..
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Old 02-21-2012, 09:00 AM   #6
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Quote:
Originally Posted by rd3311 View Post
The supply numbers for any of these models are tight, it does not matter whether 2 or 4 door, stripped or loaded. The product just moves. We also need more Optimas.
Thanks for the clarification - I was initially thinking KIA was shifting their mix to the high-end to maximize their profitability but that's clearly not the case if you can't get enough inventory regardless of the trim package.

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HMA Dealer council has said no seperate franchise, buildings etc, only dedicated space inside your existing showroom and service facilities. HMA agrees, no decision yet.
Wow, an OEM that listens to their dealers before making decisions about vehicle branding and franchise agreements - I'm impressed.

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KMA/HMA how about a "goodwill" increase in warranty labor rate, since all we are doing is selling maintenance in the service drive..
Great comment - I added it to the list in post #2 of this thread.

If Hyundai and KIA were smart they could increase the warranty labor rates for their dealers as a goodwill gesture and then issue a press release to Automotive News indicating their increased vehicle quality allowed them to make the change.
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Old 02-21-2012, 11:30 AM   #7
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My biggest concern w/ Kia is sustainable growth. Kia had a 36.3% increase in 2011 over 2010. Kia’s has increased US market for 17 straight years w/ a 78% increase from 2008 to 3.8% for 2011. Now that’s great for Kia however my concern is for the dealer body & in particular the store that I derive my livelihood from.

The last several years have been a new paradigm. Kia’s product plan has moved away from a low price point w/ high incentives & all the inventory a dealer would want. The product is top notch w/ selling prices 25% more & incentives at less than half. That’s great but dealer are starving for inventory.

In 2011 Kia increased storefronts about 8% & intends to do the same in 2012. These new stores are metro stores w/ monthly sales of 50 to 100+. Also over the last few years there’s been a tremendous turnover of under performing stores that took the points from single-digits & low teens to 50+ monthly. Dealers that wouldn’t consider Kia before are now clamoring for a franchise.

What I’ve seen w/ these new stores is they’re initially flooded w/ inventory at the expense of existing stores & later they’re begging for inventory w/ the rest of us while the next new stores come onboard.

The allocation process sounds fair w/ a 50/50 weight in 2 processes. The first allocation is your percentage of a model’s sales, the second is your days’ supply versus the days’ supply available. The problem is the third factor. “A dealers may also receive discretionary supplemental earnings from their region, to support special promotions or for other appropriate business purposes”. Now that’s a whole can of worms open for manipulation & I can’t believe they actually put that in writing.

I’m happy for Kia’s growth. Our Kia sales are up in excess of 350% from 2005. However our sales could have been 1/3 better last year if we had anywhere near the allocation we should have earned.

Increasing sales without comparably increasing supply may be good for an OEM’s margin but it doesn’t work the same way for the dealers.

Sorry for the long wind. If you ask me what time it is, I’ll probably tell you how to make a watch.
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Old 02-21-2012, 11:56 AM   #8
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Quote:
The problem is the third factor. “A dealers may also receive discretionary supplemental earnings from their region, to support special promotions or for other appropriate business purposes”.
That was viable in 2005 not now, all KMA dealers are moving product right now and bulk (special purchase allocation for promotion) additional inventory buys are not being done due to KMA being short of product itself.
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Old 02-21-2012, 01:40 PM   #9
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Our small suburban Hyundai store just need more product. And they need the customer service loyalty that Honda and Toyota owners have.
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Old 02-21-2012, 03:31 PM   #10
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Quote:
Originally Posted by rd3311 View Post
That was viable in 2005 not now, all KMA dealers are moving product right now and bulk (special purchase allocation for promotion) additional inventory buys are not being done due to KMA being short of product itself.
That statement is a direct quote from a Kia regional director’s letter this month.
It’s still happening for some.
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Old 03-05-2012, 05:22 AM   #11
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There has been recent acknowledgement of a future KMA U.S. spec version of the K9 V-8 rear wheel drive large sedan (built on Hyundai Genesis platform), please KMA can we get this car and keep the MSRP around $35K?

At this price, plus with the hinted styling it should be a volume car.

Last edited by rd3311; 03-08-2012 at 05:02 AM.
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Old 03-07-2012, 01:54 PM   #12
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There has been recent acknowledgement of a future KMA U.S. spec version of the K9 V-8 rear whell drive large sedan (built on Hyundai Genesis platform), please KMA can we get this car and keep the MSRP around $35K?

At this price, plus with the hinted styling it should be a volume car.
I've read the headlines about a possible V8 RWD car from KIA but I haven't had a chance to read the details. I share your opinion that even with higher fuel prices there's a demand for a vehicle like this if the styling and pricing are correct. I also think it could serve as a "halo" car for KIA and lift the brand's image.

When I get caught up I'll add more to this thread and include your comment in the second post.
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