Hyundai will roll out owner loyalty programs
Overstated-mileage snafu seems a nonissue for dealers
Hyundai Motor America CEO John Krafcik, in a convention speech two days before the make meeting, praised the franchised dealer system.
Photo credit: JOE WILSSENS
ORLANDO -- Despite tight inventories, Hyundai hopes a third shift of Elantra production added in September at its plant in Montgomery, Ala., will boost total U.S. sales in 2013 to 730,000, which would be a 4 percent increase over 2012.
But Hyundai Motor America might sell more if slack demand in other world markets allows for more volume in the United States. Last year, Hyundai targeted 675,000 units here but ramped up when other markets softened.
Speaking at the make meeting, Hyundai Motor America CEO John Krafcik said that as long as getting extra cars is hard, dealers should concentrate on retaining the customers they have.
Hyundai will roll out service-loyalty programs later this year and will unveil a new wrinkle of its Assurance program at the New York auto show in March, Krafcik said.
Hyundai Capital America also will roll out more F&I programs, including prepaid maintenance, GAP policies and an extended 10-year bumper-to-bumper warranty, Krafcik said.
H. Carter Myers III -- whose dealership group based in Charlottesville, Va., sells 12 brands -- said Hyundai will continue to advertise vehicles that are long in the tooth. With the Sonata now the oldest mid-sized car in the segment, Myers said, keeping share of mind with consumers against newer competitors is key.
Despite the aging fleet, Hyundai has no stair-step incentives nor customer-cash rebates, Krafcik said.
Myers applauded Hyundai's efforts to improve 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," he said.
Krafcik admitted that Hyundai's service absorption is "about 20 percent below the industry average." A suite of in-car BlueLink software will prompt customers to schedule service appointments when maintenance is required.
Scott Fink, the dealer council chairman, said Hyundai grosses -- long a sore point with dealers -- were down slightly in 2012 and are flat so far this year. He hopes the cranked-up certified pre-owned program will bolster those numbers.
Fink has three Hyundai stores in New Port Richey, Fla.
Krafcik said the average Hyundai store made $1 million in profit last year.
"We have a lot of momentum," he said. "We have a low fleet mix, and we're going to push harder into retail this year."
He said about 70,000 certified pre-owned units were sold last year, and the target is 80,000 this year.
"We have about 5,000 cars coming off lease every month, and our dealers are taking about 4,800 of them," Krafcik said.
Fink said Hyundai will push harder into leasing. The brand is currently at more than 20 percent leases.
"With consumers' disposable income down, it's harder to buy a car," he said. "Leasing starts to make more sense."
As for the overstated-mileage snafu that hit Hyundai in November, dealers said they have heard relatively few complaints. Owners of the affected Hyundai vehicles were told to go to their local dealerships for mileage audits. After the audits, they get debit cards from Hyundai.
"We got our [debit cards] within a week," Myers said. "It's amazing such a large, worldwide company could move so fast."
Fink sells about 8,000 new Hyundais a year and has yet to hear a consumer complain about mileage.
He said: "Hyundai jumped on it and took responsibility."
• Maintain marketing presence
• Increase service loyalty
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