Hyundai sales are impressive, but dealer profitability is still behind competitors

Article by Christian A., on March 22, 2011

Hyundai can boast that its U.S. sales have been outpacing the industry as a whole since 2008, but in one category – dealer profitability – the carmaker is still behind its competitors. Weak used-car sales, slow traffic in the service bay and tight inventories of popular new products have stunted store profits.

That has caused some big retail groups to stay away from the franchise, even as market share has jumped from 3 percent in 2008 to 4.6 percent in 2010, owing to higher-quality, better-looking vehicles and a successful move into upscale segments.

Earl Hesterberg, CEO of dealership group Group 1 Automotive, said to Autonews that Hyundai, for all its success, is "not yet a good business equation for dealers." U.S. sales exec Dave Zuchowski said the average profit for Hyundai dealers stood at 1.9 percent of sales in 2010.

According to Kansas consulting firm NCM Associates Inc., that’s up from 1.2 percent in 2009 and 0.8 percent in 2008, but is still lower than profits for Toyota, Honda, Ford, Chevrolet and Kia dealers. In 2010, dealer profitability for many of Hyundai's rivals surpassed 3 percent.

Hyundai is now nearing the industry average, which the National Automobile Dealers Association says was 2.1 percent in 2010. However, Zuchowski acknowledges that Hyundai trails rival Honda and Toyota, adding that the company’s goal is to be “in the very top of the non-premium makes.”

Topics: hyundai, sales, dealer

If you liked the article, share on:

Comments

Recommended

We first heard of the fifth generation SEAT Ibiza earlier this year, and last week, the company finally revealed the all-new Ibiza at the international launch in Barcelona. The new...
by - May 22, 2017
The aftermath of the Takata airbag recall still largely resounds in the automotive industry, as big automotive companies like BMW, Mazda, Subaru and Toyota were extensively hit with what is...
by - May 22, 2017
Amid reports that major rival Volkswagen would cease producing 2016 and 2017 model year diesel cars following the wake of the "Dieselgate" scandal, it’s believed that Chevrolet sees its opportunity...
by - May 22, 2017
Honda recently whips out a new feature for the S660 Bruno Leather Edition. Any guesses? Well, it’s going to be an iPhone app that goes by the name Rev Beat....
by - May 22, 2017
And so it goes, Ford is not at all closing its doors to an all-electric F-150 pickup. The American manufacturer initially laid out its plans for an F-150 hybrid earlier...
by - May 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries