To think that Kia and Hyundai are douchebags
Is your new car on a storage compound? Inside Kia's scheme to deliberately withhold deliveries
Kia Canada says it cannot comment on confidential internal business matters
Alternate article in case the CBC article is blocked.
Somebody's going to lose their job, and I bet we'll see even more charges and fines
That seems rather counter productive to increasing your market share. If I were waiting for delivery I'd be down at the dealership the day after the article and making it clear I could walk away. Whoever thought up this strategy ought to be kicking stones.
Sounds crazy to me, but it won't affect my likelihood of ever buying another Kia/Hyundai.
That's a bold strategy, Cotton.
That seems awfully bizarre.
Correct me if I'm wrong, but doesn't this "strategy" only work if it stays secret?
I can't imagine how they expected Kia HQ in Korea to not find out about this. So instead of an increase in marketing budget, they'll likely get a decrease in employment.
[edit]
Now, holding revenue from closure of these deals until after year end for tax reasons, I could understand. Which is also not news you'd want getting around, so maybe this is a cover story.
z31maniac said:That seems awfully bizarre.
Dealers are well known for their short-term thinking. Apparently this extends to management
The whole story doesn't make sense.
Unless....
...there is in actuality a far more sinister reason for withholding the deliveries. What if the cars were infused with a deadly virus (think Andromeda Strain) and this is the best (least damaging) thing the corporate marketing and legal people could come up with as they frantically search for a way to sanitize the vehicles?
Edited to add artist's rendering of potential hazard:
Well yea. You wouldn't want to use your money for marketing because you had a good year. That'd be... well capitalism. Anyway, the point is that Daddy needs a different fishing boat, and buying ads or offering end-of-year incentives would cut into that if corporate didn't kick in as much.
It sounds like supply has caught up with demand, but the dealerships want to keep the markup gravy train rolling in the same way that they had when supply was constrained.
In reply to 1988RedT2 :
Maybe you can charge a higher price due to the apparent scarcity of the product.
Sounds to me like they were just trying to perform to the metrics corporate gave them.
Sounds oddly similar to what happens in government, where if you did an awesome job of saving money all year and have a bunch left over in your budget, you blow as much of it as you can before the end of the year comes up on things that you don't really need but would be nice to have, or even just on wasteful nonsense. This is because your budget will generally get tighter every year regardless of how thrifty or wasteful you were, and you want to give yourself some breathing room rather than be caught mid-exhale with your gut sucked in when it's time for the budget python to tighten its coils.
In government where there is political pressure to starve things and drown them in a bathtub that budgeting makes a grim kind of sense, but the fact that a corporation has that kind of budgeting internally is the most messed-up thing I've heard of since the Sears internal competition debacle.
"This is about thinking not just about today and this month, but also about the next few months and the next quarter ahead."
Is that supposed to pass for long term thinking? I mean, apart from the parts of the plan that require the question "is that supposed to pass for thinking?"
alfadriver said:In reply to 1988RedT2 :
Maybe you can charge a higher price due to the apparent scarcity of the product.
My first thought was that they may be trying to pull a DeBeers as well, but that's not what's happening, and it would just hand customers over to their rivals since they're making Kias and not ultra-limited-production supercars. They're trying to not look successful in order to avoid a budget cut from HQ next year because Kia's internal business processes are horrendously messed up, apparently.
In reply to GameboyRMH :
That ridiculous approach is most definitely not limited to government.
Mentioned this to my two buddies; one a tow truck operator and the other automotive machine shop tech.
They said to check under the hoods. Kias go through engines so fast that they might need to canibalize the new ones to keep the current fleet mobile. Job security for both of them.
TL:DR the whole article, but it sounds like sandbagging to keep next years sales targets from going up too much.
Plus, overshoot by too much and your estimates lose credibility going forward, or corporate questions if you are underestimating.
I drove by that rail yard on Sunday and was surprised at the number of Kias/Hyundais sitting around, then I saw this article earlier today.
Here's the location if you want to see a bunch of cars sitting around, it's actually closer to Ayr (really nice little town) - https://maps.app.goo.gl/xnU3nSuPL3B9P32Q9 (streetview shows the yard)
In reply to adam525i :
Is it the one on Trussler road that's normally full of Toyotas?
I was thinking this morning, based on how they normally treat their customers, I wouldn't be surprised if HQ is high fiving the genius that came up with this plan.
It wasn't done to affect prices, but to make their year end look less profitable. Or was it?
Peabody said:In reply to adam525i :
Is it the one on Trussler road that's normally full of Toyotas?
I was thinking this morning, based on how they normally treat their customers, I wouldn't be surprised if HQ is high fiving the genius that came up with this plan.
It wasn't done to affect prices, but to make their year end look less profitable. Or was it?
Yep, that's the one. The Korean cars jumped out at me as I was expecting either Toyota's or whatever GM is being built at CAMI now.
So I am an ardent capitalist but this is the one area I really ding corporations on:
You cannot have record growth year on year on year. There are going to be some dips; cooperate while they know this, doesn't wan to here it because their bonuses are tied to the stock price.
I actually work for a government entity; we started letting people roll there budgets because of the spree buying at the end of the year.
Several possible scenarios.
They are deflating sales numbers to avoid a tariff or such against the brand that is growing too fast in some government department's thinking.
They are trying to create an illusion of higher than actual demand. This was and probably still is a marketing ploy. Tell customers the product is so good buyer should just order without trying to negotiate a better price.
The global supply chain has been crazy since covid. Not enough product, so prices go up. Not enough ships to transport, so prices go up. Not enough docks/unloaders, so prices go up. Now too much inventory which normally causes prices to go down so what can be done to counter that?
In reply to adam525i :
The CAMI plant produces BrightDrop electric vans these days.
Here is an interesting take. It seems that some disgruntled employees may take advantage of this situation
Rights for Kia Canada employees
One Kia manager in Ontario told Go Public that the company’s alleged decision to withhold vehicle deliveries will affect a variety of employees financially, including:
He added that he has already had customers walk away, despite paying a deposit, when they learned of the additional delays. In Canada, employers have an obligation to act in good faith and do everything that they can to allow non-unionized workers to earn money. Since Kia Canada’s decision to deliberately withhold deliveries prevents staff from doing so, it’s a fundamental breach of the terms of employment. As a result, sales representatives and service people at the company who depend on vehicles being sold to make money can consider themselves constructively dismissed. This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.
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