Kia Dealer-Friendly Within Limits

A good friend, Tom Bennett, once told me a dealership's financial statement held all of the store’s secrets.

It is a road map to virtually everything that’s going on. Everything that is right or wrong about the operation is buried somewhere in it.

If you want to know all of the answers to the questions you didn't even know you were supposed to ask, just start with every line item on the statement.

Line by line, item by item, it’s like pulling on a single loose thread in a knitted sweater. Before long the entire sweater starts to unravel.

That's sort of the way it is when I research these articles and prepare speeches and presentations. It can begin down a path that suddenly forks and takes me in a new, unanticipated direction. In my research I stumble across some of the most interesting things that most people may have missed as we are overwhelmed by a massive flow of information.

The journey to research and write this article began simply enough when I read that Kia has just promoted three top executives in North America: Tom Loveless, Michael Sprague and John Yoon. I am a huge fan of Kia and sister-brand Hyundai, so I pulled the thread hoping to get more information.

Loveless’ Kia track record as sales and marketing chief is substantial, coming out from behind Hyundai's shadow and creating brand identity and growth.

Ad guru Michael Sprague is a special kind of hero in my eyes, assuming responsibility for great Super Bowl commercials, including “The Hamster Soul Campaign.”

Yoon was responsible for the $130 million Kia plant in Georgia, my home state.

This super team deserves recognition and promotion. And you know Ziegler doesn't often praise “factory” guys.

A major dealer with several large domestic franchises called me and asked my opinion of Kia. Candidly, I told him I was doing business with dozens of dealers who had Kia stores, including some of the nation’s largest.

Without exception, Kia dealers tell me the auto maker is easy to work with and dealer-friendly, in stark contrast to what I hear from some of my domestic dealer clients.

The dealer who called told me he had heard Kia could be off-the-wall and unpredictable. I assured him, that's not what I am hearing. Apparently, Kia was pursuing him to buy an existing underperforming dealership. In the end, I think my conversation persuaded him to do the deal.

But not everyone is happy with Kia. Here’s another side item that popped up in my research.

Group 1 and Kia Motors America are suing each other in a dispute over the sale of the Pat Morrissy Kia dealership in Shawnee Mission, KS.

Group 1 was operating the dealership under an interim consulting agreement it claimed was suggested by Kia regional representatives. Group 1 expected to acquire the store. Now, Kia says the deal was never approved.

My take on this goes back to my longstanding belief that Asian auto makers are uncomfortable dealing with large, publicly owned dealership chains, no matter how successful they are. The feeling of any one entity having too much power and leverage is intimidating.

Yes, they all have public companies owning their dealerships, but that doesn't mean they’re comfortable. As a matter of fact, Group 1 sold 31,000 Toyotas last year. The dealership chain is extremely profitable and well run. Obviously, the reason for termination of the deal by Kia is not totally on the surface.

With the number of dealership acquisitions by public companies once again cranking up, I predict we'll see more of this kind of legal wrangling with auto makers trying to limit, control and diversify ownership.

Here’s where the sweater continues to unravel and takes me in still another direction. In a Google search, I came across a reference to Kia, Hyundai and Subaru as the only brands that have improved U.S. sales each of the past three years. Okay, Kia is on fire.

Then I read a CNBC reference to TotalCarScore.com, cited as an authority on all aspects of vehicle quality, praising Kia product quality. It led me to ask, “Who are these people?”

Well, it seems TotalCarScore aggregates aggregated data.

What? Yes, it takes information assembled by the top data-aggregators in the industry (including Consumer Guide, Consumer Reports, Edmunds.com, J.D. Power and MSN Autos) and then aggregates that information into one report on quality, reliability and more.

Aggregators alone worry me. Now, we have this. What’s next?

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at [email protected].