DISTRIBUTION AT HYUNDAI MOTORS

Hyundai Motors India Limited is the largest exporter and the second largest car
manufacturer in India. It currently has nine car models across segments - Eon, i10,
Grand i10, Elite i20, Xcent, verna, Creta and Santa Fe.
HMILs fully integrated state-of-the-art manufacturing plant near Chennai boasts
advanced production, quality and testing capabilities. HMIL forms a critical part of
HMCs global export hub. It currently exports to around 85 countries across Africa,
Middle East, Latin America, Australia and the Asia Pacific. HMIL has been Indias
number one exporter for the last 10 years consecutively.
HMIL currently has 415 dealers and more than 1,100 service points across India.

DISTRIBUTION STRUCTURE AT HYUNDAI

Factory/ Plant

Dealers

Dealers

Dealers

Hyundai has a single level of distribution with cars being manufactured and
assembled at the plant in Chennai. With a huge dealer network around the country, the
cars are distributed directly from the plant to the dealer directly with no middlemen
involved in the channel structure.

The Hyundai Motors plant is located in Chennai, from where after the dealer request
his order through the order request form. The order is routed through the regional
office to the plant over the companys ERP system. Once the allotted car is rolled out,
it is stored in the car lot, which has designated areas for each area.
Till very recently, the Company had their self- owned and managed Retail Showroom.
Though it is the responsibility of the Company to deliver the cars to the dealers
stockyard, if the dealer requires an order at urgent basis, then the dealer sends an
authorized person to collect the Cars from the Inland Depot/ Station. A pre- delivery
inspection is being carried out being taking the Car. If there is any discrepancy or
problem in the product, it can be returned back.
There are two different ways a car is shipped to its required destination:
1. Trucks/ Trailer
The cars are transported from the factory to the dealer stockyards through
trucks and trailers.
2. Trains
The cars are shipped through trains under the RAKE system from the plant/
factory to the Inland depots and stations at the respective cities and from there
to the stockyards of the dealers.
The Company has constructed a railway terminal within its factory premises
where all the cars required for the key markets are loaded onto a separate train
made possible by a contract with Indian Railways.
The logic behind this system is that for the key markets, the volume of cars required
are more than other markets, hence if the cars are to be sent by truck, it will lead to a
shortage of trucks for the other markets. Also the cost is more viable through such
means for such large volumes over long distances. The company pays for all the
transportation costs of the cars.
The dealers maintain an overdraft (o/d) account with the company and the payments
are done at the time of order placement before any dispatch has been made.
The dealers get a margin of around 10% per car depending on the model and variant
sold.
The return the dealers get on servicing depends on the amount payable for servicing
where the dealer levies a service charge.

A spare part component of Hyundai Motors India, Hyundai Mobis is in charge of

catering to rolling out spare items for premium vehicle models.
The dealers main profits are made on the spare parts they sell.
An efficient component dealership network with efficient spare tools will enable
Hyundai to maintain a healthy status of their efficient models.
The company also has certified vendors for spare parts of those not manufactured at
the factory itself.
The dealers get a margin ranging from 40 60% on spare parts as well as Accessories
offered in the showrooms like music system, alloys, seat covers, etc.
It is to be noted that the accessories sold in the showroom are also procured from the
HMIL and would generally be more expensive than from that sold in the open market
outside. Companies like Sony provide the music system to Hyundai and they in turn
provide them to the dealers with product warranty and guarantees.

Topics left to be covered:

Policies for canteen store department
Service and spare parts in detail
Promotional support given and expected, advertisements
Dealer meets
Trade discounts and incentives
Training to sales executives n the visit to the factory