There’s been quite a bit of activity going on recently in regards to Hyundai, especially on the retail side. Where once, dealers with deep pockets shunned the Korean company’s automotive franchises, now they’re snapping them up and in ever increasing numbers.
This probably isn’t surprising. Hyundai has significantly increased its U.S. market share during the last decade and expanded it’s product portfolio to include sportier and more luxury based offerings like the Genesis and new Equus. That, combined with increasing profitability has caused many large, successful dealers to have a look at getting a franchise, even if currently, it maybe one of the smaller stores. So far this year, it’s been reported that 40 of Hyundai’s 803 U.S. stores have changed hands with big players like Auto Nation and Penske getting in on the action.
The latter has recently acquired a store in the Phoenix, AZ area, a low-volume dealership, but has big plans for it. “I think [such stores] are viewed as an attractive opportunity, whereas, four or five years ago you were unsure of the footprint the brand was going to garner,” said Penske spokesman Tony Pordon.
Alongside more prestigious product offerings and growing market share (currently 4.7 percent in the U.S.), residuals have also improved: Hyundai was ranked as the 7th overall mainstream automotive brand by ALG in it’s 2011 Residual Value Awards, which is above the industry average, something bigger dealers see as an attractive proposition and an opportunity for growth, even in stores that are currently low volume or under performing.
John Patterson, who owns several Mazda stores in the Orange County, CA area, recently took the plunge and bought his first Hyundai franchise, after originally turning one down in 2003. Since he started running Tustin Hyundai, he’s seen monthly sales quadruple. “I think Hyundai has turned a corner,” he said. “It’s a franchise on its way up.”
[Source: Automotive News]