October 20, 2014
In the aftermath of the 2009 market crash, good retailers found themselves too valuable to disappear. Stores targeted for closure by one troubled brand were snapped up by a rising brand.
Hyundai, for instance, made a concerted effort to benefit when prime stores became available, says John Krafcik, then-CEO of Hyundai Motor America. "There were great General Motors facilities that were becoming vacant," says Krafcik, now president of the vehicle pricing firm TrueCar. "Hyundai moved in almost immediately with their dealer partners to occupy those facilities and retain some of those great people.
"We were very opportunistic, and, in particular, we were able to gain a lot of Saturn stores," Krafcik says, referring to General Motors' decision to eliminate the Saturn brand and its more than 400 franchises. Krafcik told Hyundai's retailers in 2008 that he wasn't out to create a lot of new franchise points. But Hyundai would look for opportunities to improve the existing network with better stores and improved street addresses, he says.
At the beginning of 2008, there were 787 Hyundai dealers. Today, there are 825. But more significant was a surge in exclusive Hyundai dealerships -- 621 today vs. 434 before the crisis. For the first nine months of this year, Hyundai has had a 4.5 percent U.S. market share -- up from 3 percent at the end of 2008.
"The Saturn stores we picked up came with people who had a Saturn mindset," Krafcik explains. Saturn had built a strong customer-satisfaction record by meticulously training its dealer network to create a positive retail experience.
"It was exactly what we were looking for," Krafcik says. "And as it turns out, there was a lot of similarity between Saturn customers and the Hyundai customer from a demographic and psychographic standpoint. So pulling some of these folks and their facilities into the Hyundai dealer network was a very positive thing for us."