LOS ANGELES -- Hyundai Motor America CEO Bob Cosmai has challenged his dealers to build exclusive stores.
With seven new or redesigned products arriving at U.S. dealerships in the next two years, Hyundai is seeking a second wind to its growth spurt.
"This is an important time," Cosmai said in an interview after the national Hyundai franchise meeting Oct. 8 in Las Vegas. "Hyundai's investment is huge. It's time for the dealers to step up."
From 1998 through 2003, Hyundai sales grew from 90,217 units to 400,221. This year, sales are up 3.1 percent.
Hyundai has ambitious goals to reach 500,000 U.S. sales in 2006 and 1 million by the end of the decade. To do this, the automaker wants to add 60 stores a year to keep up with the expected volume growth, most of them exclusives. That requires dealers to make a commitment, financial and otherwise.
About 245 of Hyundai's dealerships are exclusives, or about 38 percent. That compares with Nissan's 60 percent and about 75 percent for Toyota and Honda.
Cosmai has identified 194 existing dealerships that he thinks should make the jump to an exclusive store.
"We'll communicate with them in writing and open the discussion," Cosmai said. "It won't be threatening, but we will be asking how far a dealer wants to take Hyundai."
A good sign is that nearly all the 27 new dealers who have signed letters of intent have said they will build an exclusive site.
Cosmai points out that Hyundai's exclusive stores average 62 percent higher retail sales than their dualed counterparts. He says 600 sales a year will support an exclusive store.
In 2003, Hyundai stores sold an average of 649 vehicles.
For the exclusives, Hyundai will not follow sibling Kia's pattern and throw cash-per-car at the dealer. Instead, exclusives will get supplemental allocations of in-demand new products, Cosmai says. He also is considering better floorplan assistance them.
"We want them to get a return on investment as quickly as they can, hopefully within a year of opening," said Cosmai, who oversaw Acura's dealership program before coming to Hyundai.
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