If one believes the Blue Sky Reports issued by various firms, consumer demand for Korean brands i.e. Hyundai and Kia is declining along with their dealerships’ profitability. Of course, there is no arguing with the profitability numbers, but the dealerships, along with Hyundai’s luxury Genesis brand, might be worth a second look.
They took the top three rankings in the just-issued 2018 J.D. Power Initial Quality Study. The Genesis brand had the top overall score – 68 problems experienced per 100 vehicles – followed by Kia and the Hyundai brands. All three are owned by Hyundai Motor Group, a Korean conglomerate.
Overall, vehicles are getting better, the results suggested. Two-thirds of the brands in the study improved their score compared to 2017, and the industry average improved by 4 PP100 to 93 PP100.
While good news for consumers, it is kind of bad news for dealerships. Cars are lasting longer, and have fewer problems, so consumers have fewer reasons to visit dealerships. Finding compelling reasons for customers to come into a dealership, such as routine maintenance, and ensuring they have a great customer experience while there is increasingly important.
On to this week’s issue! This week I spoke with Farid Ahmad, founder and president/CEO of Dealer Solutions North America about its recent move into the U.S. market. While Ahmad says developing a market here will take time, DSNA seems quite busy already. It has aggressive expansion plans in the U.S. Read about it here.
Also this week, Ken Rosenfield returns with more pithy advice in the dealership CPA arena. He identifies weird things to look for on dealership books that may suggest a dealership is performing better than it might seem at first glance or – and this seems more likely – that something is rotten in the state of Denmark.
And we have, as always, Transaction News.