After four years of “struggling,” Hyundai Canada is reviving sales and dealers’ confidence in the company’s efforts to transform its image from a manufacturer of inexpensive cars to a formidable player in the utility and luxury-vehicle segments, said CEO Don Romano.
“We finally turned the corner [in 2018] starting in January, but with greater acceleration in the summer and [into] the fall,” said Romano, who took over the helm in 2014.
Hyundai sold 127,839 vehicles in 2018, a 1.4-per-cent decline over the same period last year. According to the Automotive News Data Center in Detroit, December sales fell 5.5 per cent compared to December 2017.
The year-to-date decline was not unexpected, Romano said.
“This was our plan as we reduced incentives, reduced fleet, focused on residual and brand improvement.
“We achieved all targets as planned. In June, the sales began exceeding the prior year and outpacing the industry, which has been declining year over year. We also did not rely on fleet sales to bolster our sales figures like many other manufacturers.”
Dealer satisfaction also is on the rise, he said.
“Our customer service jumped from 12th to fifth [in the Canadian Automobile Dealers Association Dealer Satisfaction Index rating]. Our residuals have skyrocketed and our brand metrics are at record levels.”
Dennis DesRosiers, president of DesRosiers Automotive Consultants, said the automaker’s shift toward the small-utility segment with products such as the Kona subcompact and redesigned Santa Fe compact is offsetting steep declines in passenger-car sales.
“They struggled for a number of years because they were too car focused and not enough SUV and CUV focused,” DesRosiers said. “They’ve been able to better address that in the last few years. They’re playing closer to what the consumer wants to buy.”
Gaining dealer trust in the company’s strategy was crucial, said Romano.
Shortly after his appointment, he visited individual dealerships to promote corporate changes. Hyundai Auto Canada Corp., would be launching its “Signature Certification,” designed to improve customer-service handling processes in sales and service, and bringing in a captive-finance company, Hyundai Capital Canada, to provide leasing options. There were also plans to overhaul online sales and service infrastructure.
“The initial impact [on dealers] was like giving them a drink of water through a fire hose,” Romano said.
A few months later at a dealer conference in Las Vegas, Nev., Hyundai executives presented the company’s global plans to modernize showrooms and upgrade facilities to a skeptical audience.
“A number of dealers in the audience were clearly concerned. It was a big turnoff to a lot of [them] and I totally understand why, but I explained to them that I do have a plan and it is going to grow; not only grow in size but grow in image and people are no longer going to look at Hyundai as a company that makes these inexpensive cars, but a company that builds worldclass cars.
“Now the (dealers) are like, ‘yeah, it’s coming together. I get it. I know why you had us do it.’ I’m finally getting them to fully embrace the direction.”
John Kot, Hyundai National Dealer Council chairman, said Romano has won over dealers.
“I think at the start, dealers weren’t quite sure about the return on investment,” said Kot, who is alsp president of Kot Auto Group in Kelowna, B.C. “Since then, Don has done a good job of getting a buy-in on what the mission is and what the new facilities are going to do for the brand and take it to a buyer who is looking more for a modern look.
He came in when things were going pretty good, but Hyundai knew it wasn’t sustainable and that they had to do a real wholesale change to go to the next level.”
Shahin Alizadeh, president and CEO of Downtown Automotive Group in Toronto, which sells Hyundai and Genesis vehicles, credited Romano with giving dealers a clearer view of how they’re performing by introducing benchmarks that go beyond sales.
“What he has done in terms of creating such things as key performance indicators for us as a clear point of reference of how we’re gauged and assessed as a partner in the process has been very effective,” Alizadeh said. “I told him I think other [automakers] should probably follow suit in creating those KPIs because the dealer/manufacturer relationship is very foggy.
“Will he accomplish everything he sets out to do? Probably not. At the end of the day, there’s other powers at Hyundai that have an impact on how he operates. Within the context of the Canadian market I’m sure he has a lot of power and clout, but beyond his scope there are decisions that he may not share. That’s just the way corporate global manufacturers work.”