Advertising, dealer profitability and product sharing with its Kia sibling were the main issues at the Hyundai make meeting.
Realizing that its product lineup is basically carryover for most of the year, Hyundai will bolster its advertising budget by 63 percent in 2004. Much of the gain is from the automaker making a larger commitment to network TV programs, said Bob Cosmai, CEO of Hyundai Motor America.
"We are going to be very visible in all product lines," Cosmai said. "You will see Hyundai ads three weeks out of the month, for all 12 months."
Bill Adamson, president of the multiline Adamson dealership group in North Rochester, Minn., said dealers were told that Hyundai would grow from competing in six product segments to 10 within four years.
But Adamson added that dealers were concerned about "the Kia thing" - that platform sharing between the two Korean marques would not leave enough product identity for each brand.
Tom O'Brien, who has two Hyundai stores near Danvers, Mass., said the product alignment with Kia is a worry. But because Hyundai owns Kia, it's like Ford's relationship with Lincoln Mercury, so dealers need to "get used to it," O'Brien said.
Adamson also expressed concern that dealer stair-step programs were weighted toward large dealers.
"A small dealer can hit 100 percent of his objective and get $400 a car, but a big dealer can hit 60 percent of his objective and still get $700. We'd like to see a more level playing field," Adamson said.
Cosmai countered that the plan "lets dealers be as big as they want to be."
Mike Seidle, executive vice president of Bill Seidle's multiline chain in Miami, shrugged off complaints about Hyundai margins: "Low grosses? That's the dealer's fault."