Hyundai Dealer Profits Lagging Behind Other Brands

Hyundai Dealer Profits Lagging Behind Other Brands

Hyundai may arguably be the hottest mainstream brand in the auto industry, but when it comes to dealer profitability, Hyundai dealers seem to lag behind their less popular rivals.

In a report by Automotive News, the CEO of a large dealer group told the paper that Hyundai “not yet a good business equation for dealers”. Even though the product is red hot, used car sales are weak, traffic through the service department is low and supply of the hot new cars being sold is said to be tight. These three factors are the most crucial when it comes to helping dealers turn a profit, and some potential franchisees are turning away from Hyundai as a result.

While service and used cars can cover as much as 85 percent of costs at a Chevrolet dealership, Hyundai can only count on those for 35 to 40 percent of costs, putting the onus on dealers to move new cars, which have much slimmer margins. Hyundai, for their part, has ambitious goals, aiming to become one of the most profitable dealer franchises around, but acknowledges that some of the factors that have fueled their success, like low sticker prices and reliable vehicles, may actually be hindering their progress.

[Source: Automotive News]

  • optome

    Low sticker price and high reliabilty=low margins for dealers but benefit to consumers.
    The worst combination would be high sticker price and low reliability. No wonder BWM dealers make a ton of money, LOL.

  • Ray Finkle

    I’m with you, optome!

    Just makes me want to buy a Hyundai even more, especially before they catch on to the rest of the crooks in the industry.

  • Bob

    Low profits for dealers only result on poor quality service & less than honorable practices as staff & do whatever means possible to stay employed & to keep the lights on.
    If the dealer is unable to turn a profit with a regular customer base, then owners will look to other manufacturers that turn a more reasonable profit.
    Then the customers have no dealer at all in which to get assistance from. And you have a worthless car.