Kia has set aside money to help its dealers build or renovate stores. The effort is part of a plan to boost the brand’s shaky image as it prepares to introduce several vehicles and pursue an ambitious sales target.

So far, 150 dealers have agreed to redo their stores under the program, says Jim Hoostal, director of retail development for Kia Motors America. Hoostal says he hopes to get at least 300 stores on board by 2011.

“We pay a formula to offset construction costs,” Hoostal says. “The support is based on the size of the facility. Ground-up stores get more than a renovation.”

Kia budgeted the money last summer but began rolling out the program in full force this year. The plan was implemented under former Kia Motors America boss Len Hunt, who left the company Feb. 8 along with marketing chief Ian Beavis. But the upgrade remains intact.
Benny Yount, a Kia dealer in Hickory, N.C., says he got $300,000 to renovate his store.

“They give you $300,000 for a renovation and $500,000 to build from the ground up,” Yount says. “Three hundred thousand dollars goes a long way. It allows you to go in and renovate or build new without a whole lot of restrictions. It accomplishes a unified look and the right environment for the customer.”

Image campaign

Kia is rolling out an image upgrade program for its dealerships. Here’s how the program works. Dealers
– Get an estimated $300,000 to renovate their stores
– Get an estimated $500,000 to build stores
– Must follow an approved design template

A clean look

The program is called Image Building Design Forum. A retail design firm in Dayton, Ohio, created the design template for the stores.Hoostal says Kia wants a consistent exterior appearance and a clean interior look, with a reception desk, comfortable seating area and possibly other amenities such as a coffee bar.

The program is voluntary, but Kia also is putting in place mandatory standards this year for the service and parts department. The standards require service departments to be large enough to handle all customers in the area.

“We are focused on improving dealer profitability and sales per store,” Hoostal says. “These new programs should help us do that.”

Kia wants to boost its annual U.S. sales to 450,000 units, a sharp increase from the 305,473 it sold last year. With new entries this year such as the seven-seat Borrego SUV and the sporty five-seat Soul compact, Kia believes it is headed in the right direction.

Hoostal says about 50 percent of Kia’s 650 dealers have stand-alone stores, but only 8 percent have the modern, consistent look sought by the automaker. In the past, Kia has given dealers incentives to operate exclusive stores. Now, for the first time, Kia has budgeted money to help them build or renovate stores.

Boosting the brand

“When the company first came to the U.S., we were more interested in growing,” Hoostal says. “We had an image design out there, but it was never supported. So we came up with a plan to offer incentives to build the stores. We want to strengthen the Kia brand.

“We want a more consistent look.”

Don Hobden, a partner in three Kia stores in Louisville, Ky., is a big supporter of the new image program. Hobden says his stores already meet the image standards under Kia’s KP3 program, which ends June 30, so he does not plan to renovate or build stores.

Under KP3, which began in 2006, Hobden says dealers received as much as $300 for each car sold if they met sales, service and facility standards set by Kia.

“It is absolutely important that Kia have new image standards,” Hobden says. “Kia has good product. By 2011, all of the vehicles will be new or have some sort of face-lift. At the dealership level, we have to continue to exceed customer satisfaction.”

“The store definitely helps elevate the brand,” says Dan Gorrell, president of AutoStrategem, a consulting firm in suburban Los Angeles. Says Gorrell: “A lot of the battle takes place at the store in terms of converting shoppers to buyers.” [Source: AutomotiveNews]…By: Kathy Jackson