Hyundai sees incredible sales, but dealer profitability is still behind competitors

With the success rate Hyundai is having it's only a matter of time when dealer profitability will go up.

God I hope not. Why do I want the dealers to be more profitable? This dosent affect the company at all. And it means we the customer are getting more for our dollar.

I hope this trend remains.

@Spectator

TBF, the dealerships aren't all run by snakes and demons. Just as lawyers have to eat, they have to earn a living too if we want them around to do work for us. If the incentive to sell Hyundai cars isn't there, then you won't have as many private dealers willing to sell Hyundai cars. That could translate into lower sales, then lower demand, and thus lower scale of economics for Hyundai.

Hyundai's profits are negatively affected by "Weak used-car sales, slow traffic in the service bay and tight inventories". This translates into (1) people hang onto their Hyundais for a while, (2) their cars are reliable, and (3) we're selling a bunch of 'em.

New car sales are not where the profits are, especially if your major selling point is low sticker price. After sales support in terms of maintenance and repairs is where dealers make their income.

I wish Hyundai well. Great cars for the price.

No one can compete with the hype Hyundai has produced this year, they are a darling for consumers, media and market.

But consistency is the name of the game and hopefully they continue on a solid streak

There is less than $400 markup between dealer invoice and MSRP for the Elantra. The Sonata has about $1200 markup. This is much less than other manufacturers. The service departments are getting less busy because the oil change intervals are 7500 miles or 12 months on most Hyundai models now.

That is the reason why they sell so many cars...cheap price, which means less profit.

Their prices aren't all that low as they used to be, for better or worse. Since I first bought my used Kia for dirt cheap years ago, I've been seeing prices on new Hyundais steadily rise. It may not be too long before we see some Chinese or Indian automaker taking Hyundai's place as the bargain basement seller.


That being said, I've also noticed that the autospy community's opinion toward Hyundai has drastically improved in the last 3 of years. It used to be that most comments here would run along the lines of posters pretending to be rich BMW/Lexus/Mercedes drivers and claiming they wouldn't touch a Hyundai with a 10-foot pole.

My stance has always been the same. If the car has been shown to be reliable both among people I know and in magazines, I'll buy it provided the price is right. The sub-$20,000 sedan when adjusted for 2011 dollars will probably be my choice of ride for the rest of my life.