Improving Dealer Relations Tops Hyundai Exec’s To-Do List

Improving Dealer Relations Tops Hyundai Exec’s To-Do List

In a WardsAuto Q&A, Hyundai Motor America’s new COO Brian Smith speaks about improving dealer confidence and decreasing use of incentives.

Dealerships and dealer relations are on the mind of Brian Smith, who became the chief operating officer at Hyundai Motor America in October.

Smith, 58, is responsible for various aspects of Hyundai’s U.S. operations, including corporate and product strategic direction, sales, marketing, customer satisfaction and dealer development.

He joins Hyundai after more than 30 years with Toyota and Lexus doing much the same thing. He speaks with WardsAuto about the brand and its dealers. Here’s an edited version of that Q&A.

WardsAuto: Top goals?

Smith: I didn’t even know this, but I read that in 2012 Hyundai had been No.1 of 33 brands or franchises in (the National Automobile Dealers Assn.’s) dealer attitude survey.

We’ve seen some fall off from that. So (my goal is) turning that back around. That’s almost like our customer satisfaction scorecard, because I view dealers as kind of our customers and business partners.

That would be No.1 for me: Building back strong communication, making (dealers) feel confident in everything we’re doing with the brand for the next five years so they’re willing to invest more in their facilities and bring the best people in their organization to work at their Hyundai stores.

That obviously means helping improve their profits. That’s not anything new. It’s something every brand needs to focus on.

WardsAuto: What about inventory levels and incentives to lower them?

Smith: Our days’ supply is higher than any of us want (68 in November compared with 52 in November of last year, according to WardsAuto data).

Incentive levels as a result of that had to go up quicker than they should. That’s had a negative impact on a lot of things. It helps (move) some product, but it’s not the best solution long-term.

So I want to figure out how to (change that). Kenny Lee, our new CEO, is very committed to those same goals. Production needs to start matching demand. We need to get inventories in line and help both dealer profitability and our profitability. (We need to) control incentives and really grow back the dealer confidence.

WardsAuto: CUVs are hot, cars are not. What can you do in the interim to move cars before new CUVs arrive? Keep applying incentives?

Smith: One way to help bring the incentive load down is by doing an even better job at both marketing our products and making people fall in love with Hyundai and on the sales floor making sure we are giving our salespeople the best tools to help sell value.

Both of those things can help limit the need for pure incentives on price. We have a national walk-around contest coming. We want to make sure our salespeople know how much they’re appreciated and get the tools they need to sell.

We can’t expect them to go out on the showroom floor and (on their own) know everything about the products. So our walk-around contest will help them. And (it has) some significant prizes that will help them realize Hyundai is focused on them.

WardsAuto: Genesis vehicles once were high-end Hyundais. Now, Genesis has become a standalone luxury brand. Your thoughts on that?

Smith: We have some challenges with how we split the franchise from the current Hyundai dealers in the way it’s a win-win.

In most markets, I think we’re going to find great Hyundai dealers who want to be Genesis dealers. If we run into markets where there isn’t a Hyundai dealer who’s qualified or doesn’t wants to be (a Genesis dealer), we’re going to have to go outside, but I think that will be relatively limited.

I’m excited about it. And the products are amazing. I drove a G80 Sport. It’s spectacular.

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