Hyundai aims to increase owner loyalty
Hyundai Motor America CEO John Krafcik acknowledged Hyundai's service absorption is "about 20 percent below the industry average."
Photo credit: JOE WILSSENS
ORLANDO -- Hyundai Motor America hopes that the third shift added in September at its Montgomery, Ala., plant will help the company boost 2013 sales 4 percent, to 730,000 units.
But Hyundai might sell more than that if slack demand in other markets allows for more U.S. volume. Last year, Hyundai targeted 675,000 units, but totaled 703,007 for a gain of 9 percent when other markets softened.
Speaking at the make meeting today during the National Automobile Dealers Association convention here, Hyundai Motor America CEO John Krafcik said that as long as getting extra vehicles is hard, dealers should focus on customer retention.
Hyundai will roll out service-loyalty programs this year, and will unveil a new wrinkle of the Assurance program at the New York auto show in March, Krafcik said.
In the past, the Assurance program has protected buyers who lose their jobs, guaranteed the trade-in value of its cars, and notified 911 in case of a vehicle crash.
Hyundai Capital America also will roll out more finance and insurance programs, including prepaid maintenance, guaranteed asset protection, or GAP, and an extended 10-year bumper-to-bumper warranty, Krafcik said.
H. Carter Myers III, who sells 12 brands at his Carter Myers Automotive dealership group headquartered in Charlottesville, Va., said Hyundai will stay active in advertising vehicles that have become long in the tooth. With the Sonata among the oldest cars in the mid-sized segment, keeping share of mind with consumers against newer competitors is key, Myers said.
Despite the aging fleet, Hyundai has no stair-step incentives nor customer-cash rebates, Krafcik said.
Myers also applauded Hyundai's move to increase service retention.
"We've been so busy selling cars that we're not so good with getting folks in for that first service, for tires and brakes," Myers said.
Krafcik acknowledged Hyundai's service absorption is "about 20 percent below the industry average." A suite of in-car Blue Link infotainment software will prompt customers to schedule service appointments when maintenance is due.
Grosses down slightly
Dealer council chairman Scott Fink, who has three Hyundai stores in Florida, said Hyundai grosses -- a longtime sore point with dealers -- were slightly down in 2012 and are flat so far this year. He hopes a cranked-up certified pre-owned program will bolster those numbers.
Hyundai's certified pre-owned program generated U.S. sales of about 70,000 units last year, and is aiming for sales of 80,000 units this year.
Krafcik noted that the average Hyundai store made $1 million in profit last year.
He added: "We have a lot of momentum. We have a low fleet mix, and we're going to push harder into retail this year."
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