When Frank Howard started in the vehicle sales business 40 years ago, the customer of the day would visit eight dealerships while scouting their next set of wheels.
Nowadays, the average vehicle-buyer visits just two.
“Years ago, they didn't know what they wanted,” explains Howard, owner and president of the Capital Auto Group, which includes Capital Hyundai.
“Now, they've got all their homework done on the internet and they just come in and say, 'I want to look at a Tucson.' They're not coming in here to look at a Santa Fe, a Tucson and an Elantra.”
Automotive dealers are becoming increasingly aware of that consumer shift in recent years and, in their own way, they’ve all started to respond accordingly.
For Hyundai Auto Canada, the response involved launching a new dealer image program in 2014 aimed at enhancing the customer by giving the dealerships a more modern and high-end look, thereby elevating the perception of the brand.
“They want that affordable luxury,” says Jon Howard, the group’s Chief Operating Officer and Frank’s son. “They want the customers to have a luxury experience, but it's an affordable product.”
The image rebranding is meant to line up with new models and updates to existing models the company has started rolling out, such as KONA — the new crossover sport utility vehicle that Jon says they haven’t been able to keep in stock since it first arrived on the showroom floor — and the completely resigned 2019 Santa Fe.
They might have the look and feel of a higher-end vehicle in the same class, but the average car-buyer won’t be hit with sticker shock.
For the Capital Auto Group, renovating its existing Hyundai dealership at 479 Kenmount Rd. — sandwiched between its Capital Mitsubishi headquarters and competitors at Penney Kia — wasn’t an option. So, the decision was made to build an entirely new Hyundai dealership and group corporate office at 515 Kenmount Rd., land on the opposite side of the Kia dealership that the company had already been using for vehicle storage.
Once complete, the over 68,000 square-foot, two-storey facility will be the biggest physical Hyundai dealership in Canada.
“It's a flagship building for Hyundai,” says Frank, who estimates the total development cost to be between $10 million and $15 million, likely closer to the latter figure. “We're going to have the newest and the best building on the street, bar none.”
In terms of aesthetics, the blue and white that Hyundai has traditionally used as its exterior brand colours are being replaced with bronze. Interiors, meanwhile, will feature modern furniture, expanded customer lounges, plants and indoor trees, a floor designed to resemble a natural landscape, and a premium show room for the brand’s higher end cars along with more showroom space in general. (Penney Hyundai in Grand Falls-Windsor has already undergone the makeover.)
The Howards say the vehicle sales market, following small but consistent growth from the early 2000s through to 2016, has started to stabilize.
“I think what the dealers are finding now, if it stays at that level, which it has been for the last few years, they don't have the service centres to be fixing these cars when they do come back for service,” says Jon.
“Most expansions that are happening are more service-driven than sales driven.”
And that’s where the real expansion value exists for Capital Hyundai.
In the fall of the year, customers often have to book a simple tire change two and three weeks ahead of time. Moreover, there just wasn’t enough space on an already cramped and limited parking lot to accommodate the number of vehicles coming in for service.
In addition to parking for 750 vehicles — three times the current number of spaces — the new facility features an interior three-lane service drive-thru that can accommodate up to 12 cars at a time. Without stepping out of their car, customers will meet directly with a service advisor, during which time state-of-the art technology from Hunter Engineering will be used to check tire tread depth, wheel alignment, battery check, brake pad thickness and other vehicular information.
“Before you even get out of your car you're going to have all this information, whereas before that vehicle would have to go into the shop, you're already long gone to work and probably couple of hours later we'd call you after a long manual process,” says Jon.
Just beyond the drive-thru will be a two-car quick turnaround lube centre and a brushless car wash.
“We just want to get people in and out of here as quick as possible,” says Frank, noting turnaround times of 20 to 30 minutes for simple jobs like oil changes.
The total service capacity will nearly double in size from 22 to 40 bays.
As for the fate of the existing building once the company moves a couple doors up the street, the Capital Auto Group has yet to make any decisions, but suggest it will “make every attempt to re-purpose as efficiently as possible.”
Construction on the new facility starts next Monday and should be completed in about 18 months for a grand opening in early 2020. It’s one of three projects underway within the group, as the Subaru and BMW dealerships further down Kenmount Road are also undergoing expansion.
“It's going to be a busy couple of years for us,” says Jon.
In other Capital Auto Group news, the company introduced Capital Auto Rental earlier this year, with 25 vehicles available in the fleet.
“You always hear in Newfoundland, especially this time of year, about how you can't find a vehicle to rent in this city,” says Jon. “We were like, 'What are we doing? We have loads of vehicles, we just need to put a little process, a little operation together.'”
Between offering them as rentals to customers getting their vehicle serviced at one of the group’s dealerships or to out-of-province visitors, the summer season saw the inventory regularly sold out.
While that’s great for tourist season, Frank says the plan is to start engaging insurance companies so they can make it a year-round profit centre business.