Report: Hyundai may be piling on the sales, but dealers aren't piling on the profits

Hyundai is holding a hot hand with its current lineup. Sales are climbing and perception of the brand is swinging strongly in the right direction. Not everyone is singing just yet, however, because Hyundai dealers are apparently lagging behind the competition in one very important area: profits.

In 2010, the industry-wide average dealer profit was 2.1 percent of total sales. Hyundai has seen its average dealer profit rise over the last few years, but according to Automotive News, it's still below industry average; last year, Hyundai dealers earned 1.9 percent. On the flip-side, Honda dealers enjoy an average profit of nearly three percent of total sales.

One area where dealers see hefty profits is from the service bays and parts sales. Ford and Chevrolet dealerships might see 85 percent of their overhead costs taken care of by the service department. A typical Hyundai dealer may earn enough to handle 40 percent.

Hyundai dealers also have to contend with shortages of their popular models and weak used-car sales. Yet as more folks buy Hyundai vehicles, the dealers will increase the speed at which they catch up with the competition. More vehicles on the road will lead to a rise in trips to the service bay and parts sold. More used current-generation vehicles will help turn around used-car sales. Hyundai dealers know this, and 85 percent of the nearly 800-strong network is operating in the black.

Photos copyright ©2011 Zach Bowman / AOL

[Source: Automotive News – sub. req.]