TSTATION SUITS UPSCALE KOREAN MOTORISTS TO A “T”

Seoul, South Korea – For most North Americans, Hankook is known as a manufacturer of tires. But across the pond in Asia, the world’s seventh-largest tire company also operates various auto shops such as Tire Town and TBX. Hankook’s latest retail venture: T’Station, an upscale auto shop with a mandate for delivering premium service.

There are about 250 T’Stations in South Korea plus 40 outlets in China; 12 T’Stations are corporately-owned by Hankook; the rest are franchised. (Hankook says it has no immediate plans to expand into North America.)

The five-bay T’Station shop in Seoul that I visited is owned by Byoung Hee Yoo. Byoung says the initial capital outlay for a T’Station ranges between US$200,000 to US$500,000, including construction of the building. However, this figure doesn’t include the land, and Byoung’s 600-sq.-metre shop is worth about US$8 million given that it’s located in one of Seoul’s high-rent districts.

Byoung says T’Station’s mandate is to provide a high level of service in a pleasant atmosphere, noting that T’Station invests heavily in staff training. The prime customer target is imported car owners, as well as women motorists.

Byoung says annual revenue for his shop is US$70,000 to US$80,000 per month with the lion’s share of the revenue (70%) coming from the sale of tires. He employs three technicians and one receptionist (Byoung himself is a tech.)

A benefit of being a T’Station franchisees is that equipment such as the balancer and wheel aligner are free for the first three years. After three years’ time, the shop’s equipment can be purchased for 20% of cost if revenue targets are met. If the shop fails to meet such targets, the equipment is purchased for 50%-60% of cost.

Part of the appeal of a T’Station is the attention given to maintaining a clean, well-lit environment – which, he says, is specifically appealing to women as well as higher-income clients. True to form, Byoung’s shop is spotless and is well-appointed with vending machines dispensing both hot and cold refreshments.

As well, the shop has a detailing bay onsite, a service that is especially appeals to owners of high-end cars, notes Byoung. (And he’s likely right – when I was visiting his shop, one of the vehicles being services was a late-model Maserati.)

Interestingly, the shop’s primary way of communicating to clients is via text messaging; evidently, texting is the preferred method of communication for South Koreans.

As for prices, T’Station charges about US$35 for a conventional oil change and US$70 for a wheel alignment on Korean domestic cars.

There is also an obvious effort put towards the presentation of tires at T’Station. The inventory of tires at Byoung’s shop is wrapped in copper and silver foil – appealing enough to look good under a Christmas tree.

Bottom line, the attention to detail, cleanliness and an upscale clientele would appear to be paying off for Byoung: he says his shop has experienced a 30% sales uptick between 2006 and 2009.