Sat | Dec 5, 2020

Magna Motors upgrades showroom design for more ‘impact’ - Roll-out set for December

Published:Sunday | October 18, 2020 | 12:13 AMNeville Graham - Business Reporter
Graphic representation of new Magna Motors dealership/Hyundai Jamaica showrooms.
Graphic representation of new Magna Motors dealership/Hyundai Jamaica showrooms.

A confluence of events, not least of which was the outbreak of the coronavirus, has led to delays in the showroom and headquarters being developed in New Kingston by Magna Motors, the dealer for Hyundai vehicles.

But some of the hold-up comes from revisions to the scope of work, which has helped to drive up the cost of the project by 20 per cent to US$12 million.

Marketing manager at Magna, Etmour Williams, says completion of the complex is now set for year-end. Its original deadline was mid-2019 but procurement and commencement delays pushed that back to October, according to Williams; and then came the COVID-19 pandemic, and changes in scope of the job and design tweaks, pushing the timeline even further back to this December.

The designs were modified to create “the most impactful” Hyundai facility in the Caribbean, Williams noted.

“Naturally any time delays and stoppages will push up your original costs,” he said. “Added to that, there was a change of managing directors and a few design tweaks and changes ensued.”

Magna Motors Jamaica was first managed by Juan Vargas on its market entry. The reins have since been passed to Erick Gutierrez.

The new complex being developed on a 2.52-acre site at Oxford Road, down the road from rival ATL Automotives, will incorporate the full range of services for maintenance and repair, a unit for pre-owned vehicles, and even a kids’ zone. Williams says it the site is seven times larger than Magna’s two current locations combined, and that the new parts department being set up at Oxford Road will be six times the current offerings.

Magna presently has a five-space showroom at the corner of Orchard Road and Old Hope Road, and a four-bay service centre at 22-24 Balmoral Avenue.

“We will be having 12 servicing bays with the capacity to serve up to 100 customers per day. This is over 300 per cent increase, based on existing locations. In addition, there will be a 10-space showroom,” Williams said.

Magna is going big even as the market for new cars is shrinking.

Data from the body representing auto traders, the Automobile Dealers Association, ADA, indicate a dramatic decline in demand for the top-selling models up to August, relative to sales in 2019.

Market leader Toyota fell from 2,537 units to 1,088; Honda sales declined from 1,171 to 597 units; while Hyundai lost half of its sales, falling from 732 to 351 units.

To counter the fall-off, companies have launched marketing blitzes aimed at ginning up sales. Toyota Jamaica is running has its ‘20th Anniversary Thanks a Million’ campaign; ATL Automotives, which holds the Honda dealership, has partnered with a number of financial institutions to offer deals; and Magna has its ‘Live More’ campaign where the company has partnered with tourism interests to offer free ‘staycations’ at Royalton Jamaica.

Williams says the shrinkage in the market has seen its share drop from 9.5 per cent at the art of the year to nine per cent.

“The entire automobile market fell by 19 per cent, based on total output for the month of August,” he said. “The ADA report showed that Toyota started year 2020 at 28.5 per cent and Honda at 14.4 per cent; then in August, Toyota fell to 18 per cent, and Honda went up to 16.7 per cent,” Williams said.

There is no indication yet regarding the effect of the promotions – the next ADA report is not expected until the end of October – but key industry personnel say there has been a slight uptick in business in recent times, even as the already fierce competition for buyers seems to be heating up.