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Dealer group Spirit Hyundai differentiates itself by building strong relationships with customers
Formed in 1991, Spirit was one of the first VW-sponsored dealers. The Hyundai franchise was added in 2005 before the VW element was sold to Lister Group in 2011. At this point MD Adam Derbyshire took over the business from his dad.
Spirit Hyundai has two outlets, in Northampton and Corby; the latter is less than three years old. But the group is already planning for future growth.
The Northampton outlet was originally Kia and then you changed it to Hyundai. Why?
We left Kia in 2007. The brand was going through some turbulent times and Hyundai had just become a wholly-owned subsidiary. This was a key factor. We wanted a brand wholly owned by the manufacturer.
As sister brands are Kia and Hyundai very different?
I can’t comment on that as we no longer have Kia but you do feel that Hyundai is the ‘mother ship’ and gets more focus in the UK from Korea. Going with Hyundai was the best decision we ever made – when we look at how dynamic the marketplace is today, there is a big rebalance going on, the established ‘elite’ are starting to struggle. One of the most exciting things about Hyundai at the moment is the change in the customer demographic. Today we have people walking into the business directly comparing us to the latest Volkswagen product. Five years ago if we had suggested that would happen people would have laughed at us.
Is digital key to getting your message out?
We wanted to create a competitive advantage in our regional market. The growth of digital has produced price-comparison websites with discount-accelerator models to draw buyers to them, so we needed something else. If you all go on a price war, nobody wins.
We used our digital channels to become more integrated in our local community. We’ve had to do that to build the brand – we need to get people to test drive our cars, unlike a VW dealer, which has the natural pull of the brand. Once people drive a Hyundai, they love them.
Once customers are drawn to the centre, how do you ensure your staff create the right impression?
We use a no-pressure strategy. We’re surrounded by car supermarkets that are notorious for strict, high-pressure sales. They work on a very different high-volume, low-margin business model that we can’t compete with, so we have to be different.
We talk to our customers in a no-pressure environment that’s relaxed but professional. That way we get people in the right frame of mind for a long-standing relationship and earn a good reputation.
We ensure our people are properly rewarded; we have very low staff turnover as a result. Customer reviews always indicate how happy our staff are and we focus very heavily on our social media and Google reviews. We are consistently high, around 4.8 [out of 5.0] on average, with a lot of reviews.
When you need to recruit do you find it difficult?
To get the right people, yes, and I believe it’s because the demographic of the job seeker has gone through a massive change. The millennial generation are not happy with the standard job-for-life, fair-wage concept. They want to feel from day one that they are making a difference and adding value.
They also have to be right for Spirit?
You need to ensure people you recruit will fit your business from a human point of view. We have found success recruiting from car supermarkets, they are process-driven but depressed by the high-pressure environment. They’re want to work with customers, be part of the entire experience.
The customer likes the fact that their entire process is dealt with by one person who does not keep disappearing into an office.
And the most challenging aspect of today’s retail motor industry?
Speed of change – product-led change is out of our control, particularly the speed of technology. Then there is the political and social environment with Brexit and similar issues, such as dieselgate.
It’s all change and change at speed. Historically the motor industry has only dealt with one or maybe two areas of change at a time, now there are a multitude.
You mentioned growth ambitions – maybe new franchises?
With Corby established we are building for future growth, working hard on our accounts, our finance department, the flow of business information, using outside consultants to provide us with the skill sets we don’t currently have.
My job now is to build our finance department and a solid, strong, unified senior management team. We are getting fit, ready for the next move – this could be further expansion with Hyundai but it could also involve other brands.
A squeeze on supply could start to crash the car supermarket business model that is based on volume. They may have to put their margins up which will remove their advantage over franchised dealers – customers would always rather buy from a dealer than a supermarket.
