Keeping Hyundai Dealers Lean Mean Fighting Machines

Washington DC September 10, 2012; The AIADA newsletter reported that even after Hyundai's best August ever, its dealers are painfully aware that they could sell many more vehicles if the automaker could provide them.

Dealers are selling vehicles rapidly, mainly to keep their precious vehicle allocations, reports Automotive News. "Years ago, I remember, if we wanted cars, especially domestically made cars, there were tens of thousands of cars on the ground in Alabama," said Scott Fink, chairman of the Hyundai National Dealer Council. "Now there's none. We don't have enough cars, the manufacturer doesn't have enough cars, and we have consumers standing in line to buy our cars. It's a far better situation."

Hyundai just reported its best August ever in the United States. The brand sold 61,099 vehicles last month, up 4 percent from August 2011. A big reason for the brand's banner month is the speed at which Hyundai dealers are selling vehicles.

During the first eight months of the year, the average Hyundai vehicle sold after 27 days on a dealer's lot, compared with 34 days in the same period last year, said John Krafcik, CEO of Hyundai Motor America.

Krafcik said Hyundai's U.S. assembly plants, which build about 50 percent of the Hyundais sold in the United States, also are efficient. The plants' production mix matches customer orders "almost 100 percent" of the time, he said. "We're getting much closer to a situation where we're matching customer orders to what's in the pipeline," Krafcik said.

On Sept. 1, Hyundai had a 29-day supply of vehicles. For comparison, the Ford brand had a 56-day supply, and Toyota was at 40 days, according to the Automotive News Data Center.

Click here for more from Automotive News on the challenges associated with Hyundai’s success and lean inventory.