Benny Yount, chairman of the Kia Motors America Dealer Council, says Kia's new COO Len Hunt has made an effort to speak with dealers and wants to cultivate relationships with them to understand their needs.
Dealers are pleased with the new Rio and Spectra and are looking forward to the new products they expect to see in the next three years. They want to make sure shoppers realize the improvements Kia has made in its product lineup.
Kia's Circle of Excellence program, which rewards dealers with money, is scheduled to end in March. Yount, owner of three Kia stores in North Carolina, says the dealer council is working to encourage the company to create a replacement program.
Also on dealers' wish list are cash incentives that allow dealers to put deals together for subprime customers.
Yount spoke with Staff Reporter Gail Kachadourian.
What's hot at Kia? What's not?
The hot products right now are the new Rio and the Spectra.
The Amanti has been a little slow, but they have just come up with a lease program. There are some pockets of the country where that has really started to take off. That has probably been our slowest seller.
What new products are on the way?
Through '09, we're going to have a number of new products that will come on board. The first two of those will be the new Sedona van and the new Optima. We're going to add another three or four new models by '09. There is speculation and hope that we're going to see a truck.
What challenges do Kia dealers face in the next year?
We've not really had our own finance arm from Kia. We've had to use other sources. Now with Kia announcing they'll put together Kia Motors Finance, that's going to help us work through that challenge. It's not like we're going to be just another customer out there. We're going to be the main focus.
One of the biggest challenges we face is people becoming more aware of our product, our lineup and what we have to offer. We've had a pretty good niche at the entry level, and as we've expanded our lineup, the challenge is to make people aware of those other products.
What is the top priority of the Kia dealer council in 2006?
We've been working very closely with the management at Kia to make sure the lines of communication are open.
Kia is one of the best dealer councils I've been on when it comes to communication. They're very willing to listen, and the dealer council has the opportunity to give input and it's taken and it's received and it's used.
What is your major goal for the upcoming year?
My goal is just to make sure that we have the best level of communication that we've ever had between the dealer council and Kia, and that we're able to achieve our sales goals and we have the necessary programs in place that assist the dealers in doing that.
What is the No. 1 thing the factory can do to help Kia dealers?
Bigger rebates. The number one thing they can do to help us is to make sure we have the programs in place that will help us move the vehicles. As a whole, we feel a lot of people are coming in to not just Kia but others, too, with negative equity, with marginal credit or subprime. So it's needed to have programs in place in the forms of cash incentives that allow us to really be able to put a deal together.
Does Kia have those in place?
We do have some. I'm hoping in the future we'll continue to have those programs and they'll be enhanced as needed.
What are the Kia dealer council's top concerns?
The Circle of Excellence program comes to an end at the end of March. We've been working hard with Kia to make sure there's some type of program where Circle of Excellence is concerned that will continue in some shape or form.
The COE is a program that rewards dealers who are exclusive and meet the criteria in facility and some other requirements, and you're reimbursed a certain number for each new car you sell. About 70 percent of Kia dealers are exclusive. It's gone a long way in encouraging dealers to be exclusive. The Circle of Excellence money has made that possible.
How satisfied are dealers with Kia?
I'm very satisfied. The future is very bright for Kia. They're very committed to the U.S. market and to making sure they get it right in product and service and in relationships to the dealers.
James Lee, our new president and CEO (of Kia Motors America, is) making a big commitment. He's brought Len Hunt on board. At the last dealer council meeting, they both made commitments they want to take this franchise to the next level. They're willing to work with dealers.
Do most dealers share your opinions?
The majority of the comments I get from dealers are very positive, very upbeat and they're excited about the new products we have coming.
Why do you want the Circle of Excellence program to continue?
That would help pay for those (new Kia dealership buildings). And it would encourage other dealers to become exclusive and upgrade and build new facilities. The more exclusive and newer and better facilities we have, the better the image of the Kia franchise.
What is Kia's pricing strategy?
For the most part, our products have always been priced under our competition, which definitely gives us an advantage. The strategy in the past was to offer a good product, as good as our competition at a better price. We've had good product at a better price and programs that supported us, enabled us to put deals together, that's been in the form of generous rebates and cash back to dealers and some good incentive programs. That's what I want to see continue.
It goes back to having a lot of people coming in with negative equity and credit issues, you need those types of rebates and programs to put deals together.
Are Kia dealers making money on new-vehicle sales?
I can't give you those numbers as a whole for the Kia dealer body. I can only convey to you our situation and our stores. We do make money on new Kias.
Do Kia dealers have the right product mix and overall marketing strategy to be successful?
We have the right product mix. And our marketing strategy, I think they're trying to do everything they can, but that's always a moving target. This is one of the things I like about Kia. In dealer council meetings, we meet with the advertising agency, and they're always looking for our input. I know they take the information we give them and try to incorporate it.
Is there anything dealers want in the lineup or would like to see faded out?
We want a truck. We want a sports car. We want a car that's going to sell for under $10,000 - all that kind of stuff everybody wants.
How many of your customers ask about hybrid vehicles?
A small percentage.
How important to Kia customers are safety features compared to other vehicle attributes, such as styling and performance?
It's one of the most important things customers look at when they're considering our products. I'm very pleased to say our new entry-level car, the Rio, has six airbags in it. We've got some good, safe products.
Is Kia demanding that dealers adopt a uniform style of décor, or remodel the store's exterior?
Kia has been very flexible with the stand-alone stores. They do have a general look they'd like for you to comply with, but you're not forced to. They're very helpful in suggesting "This is the look and image we'd like," but they do not dictate to you that you've got to have certain color combinations or exterior finishes. They're very flexible.
The signage has to be the correct signage, and that is required, but everybody understands that.
Does Kia's advertising work?
It's working, but we have some areas where we can improve.
What changes do dealers want in advertising?
The direction the dealer council has suggested in our last meeting (in October) is we would like to see more event-based advertising, where we come up with some events throughout the year and we work hard to make sure it's a big deal on the media airwaves.
An example, you have Oktoberfest, we want to have Kiafest. We have suggested that to the advertising agency. I think we'll be able to do some of that stuff in 2006.
What are Kia dealers' feelings about Peter Butterfield getting fired at the national dealer meeting in October?
Most dealers were very surprised that it happened and when it happened.
Was it a good or bad surprise?
You always have some people who want change and other who don't want change.
What are Kia dealers' feelings about new COO Len Hunt?
Everything I've heard so far has been positive. Len called me the first day he was on the job and wanted me to know that he wanted to work with the dealers and the dealer council. He was excited about being there, very excited about the product that Kia has. I know he's made an attempt to call a lot of the dealers. He wants to be very hands-on with the dealers and make sure he understands their needs.
Are Kia dealers worried about similarities in product with Hyundai?
There is a concern about that, but Kia has conveyed to us that they expect in the future there will be more and more differences in the product lineup between Hyundai and Kia. They've tried to make that clear to the dealers.