Don Romano is in the driver’s seat of the all-new Hyundai Accent and, as usual, he sounds like a man with a plan.
He has just wrapped his presentation at the Canadian International AutoShow, which included the world premiere of the 2018 Accent, and is done speaking with interested journalists and various media-day hangers-on intent on bending the Hyundai Canada chief’s ear for a few minutes on one topic or another.
Though he has already answered a heap of questions, he seems eager to talk about the automotive retail model and where he sees the future heading. And why wouldn’t he? When you’re in charge of the first mainstream OEM running the industry’s first truly complete online retail sales system, it’s easier to ponder the next steps.
Canadian AutoWorld is sitting in the passenger seat at the Hyundai booth and spends the next 20 minutes talking to Romano about online sales, facility image programs and why we shouldn’t expect a ton of growth from Hyundai in 2017.
Canadian AutoWorld: The Hyundai Global Dealership Space Identity has been in market for about two years in Canada. Detail the progress to date.
Don Romano: It’s going well. We will have over 70 stores completed by the end of this year. There are roughly 20 totally finished now and another 30 that are nearing the end of the construction phase. We have about another 20 breaking ground around now.
In 2018 we will have another 100 wrapped, then a handful in 2019 to finish the whole network. It seems as though Hyundai started a corporate image trend with many automakers announcing plans to renovate its retail network in the last 12 months.
If a brand is going to progress, it has to change. If you took a look at a new facility 20 years ago and a new one today, the changes are incredible, and not just on the exterior.
The bigger changes are not as noticeable. It’s not just the façade and the cladding, it’s what you are trying to accomplish on the inside.
It’s also about changing the behaviours and how we interact with our customer and getting rid of the old stereotypes around retail and selling cars. That’s as much a part of the change in design as the actual features of the dealership.
Cars are changing more rapidly than ever. The amount being invested in R&D across the globe from auto manufacturers is at an all-time high as we get into autonomous systems, connectivity and new mobility, not to mention electrification.
This investment is going to reshape a lot of the brands and as they are reshaped, the manufacturer is going to want to project that brand at the point of sale.
Speaking of changes on the inside, how is the Signature Certification going?
That is going well, too. We partnered with J.D. Power on Dealer Signature Certification program to ensure we were exceeding the needs of today’s customer.
Not all dealers are Signature Certified and it is a process that has to be renewed every year. The certification is more about ensuring the systems are in place and working and that we have measurable results on the program. Genesis has made some waves for its online retail strategy.
Hyundai just launched a new corporate website. Is there truth to the rumour that Hyundai will see some of the digital retailing technology trickle down from Genesis?
We will be launching a program call Hyundai Express this summer that takes a lot of Motoinsight technology that we have used for Genesis and applies it to Hyundai.
However, because we are a franchise system for Hyundai, as opposed to the agency system for Genesis, there is only so much we can do. When you’re selling direct we can set the price wherever I think it should be. With the franchise system, prices can vary. Making that variability easy to accommodate online is very challenging.
Hyundai Express will make the buying process faster, more transparent and less painful, but there will be a Hyundai dealer on the other side who will be accommodating the pricing. What features will we see with Hyundai Express? Customers will be able to configure and build car, get credit preapproved and get a value on their trade-in, though assessing the used car requires an interface.
We had to make the used-car valuation tool more robust for Hyundai side so dealers could get more information about a vehicle. The system allows customers to upload photos and put in more information to give a more accurate quote for the trade-in.
How will the leads be dolled out to the dealer body?
The customer can decide on what dealer they want or it will be determined by postal code.
What has the reaction been from you Hyundai dealers?
Mixed. They are of the opinion, and rightfully so, that they want to see it before they believe it. The dealers that have Genesis love the Express model; they are my biggest ambassadors. The ones who don’t have Genesis are unsure about it.
My hope is that as they see these tools come through they will learn more about what we are trying to do to make them [dealers] relevant in the future, because it wouldn’t take much for our dealer franchise system to become completely irrelevant.
Tesla should be a warning sign to all of us that there are other ways it can be done. And there is no reason that we, through our dealers, can’t do it even better. We just can’t be opposed to change, because that will kill us.
How do you plan to convince them of the need to change?
I want to make sure our dealers feel comfortable with it. We have these roadshows that we call fireside meetings where we visit every city across the country with more than five dealers. We meet with the dealers and have discussions. I want to go through that with Express so everyone is on board.
Give us a little insight into Hyundai’s business plans for 2017.
This will not be a year of expansion but rather about focusing on customer service, getting facilities in place and getting the Genesis infrastructure put together.
We’ve been fortunate to get the production requirements for Canada pulled back a bit so we don’t have so much pressure on volume so we can focus on customer experience and service and using technology.
We’re looking to hold our own and maintain. I think the market will go down a little so if we maintain we would actually grow market share.