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Hyundai plays it safe in 2016

New beginnings: Each new model is helping build the Hyundai brand in Australia, according to the company’s chief operating officer Scott Grant.

Sales to remain steady as Hyundai banks on quality new product to boost brand

23 Feb 2016

HYUNDAI Motor Company Australia (HMCA) will continue with its plans for sustainable growth, but new chief operating officer Scott Grant does not expect the company to make major sales gains this year.

The South Korean car-maker ended 2015 with a record haul of 102,004 units, just 947 sales behind GM Holden which retained third position in the marketplace behind Toyota and Mazda.

Despite Hyundai’s consistent growth in recent years, Mr Grant, who replaced John Elsworth in December and is a former head of Lexus Australia and Holden Special Vehicles, does not believe the bullish Korean brand will overtake Holden in the sales race this year.

“I don’t think so,” he told GoAuto in an interview at the launch of the new-generation Elantra in Tasmania this week.

“Holden’s a long-time, iconic brand in Australia and rightfully so, very well connected in the Australian marketplace and I think they have an outstanding product range and brand heritage and we are focused on our own products and our own brand and our own gameplan and trying to move that forward.

“If something like that happens moving forward in terms of the rankings, then it is more a fallout of a process that we have invested in rather than a specific target. There may be times into the future when we go up and down in volume based on product availability and other issues.”

Mr Grant said he expected Hyundai to end 2016 with similar sales figures to last year, and highlighted changes to the product line-up that could impact the final tally.

“Our internal planning has moved to a more flexible base where we are not perhaps setting a big number target at year end we have some vision of where we should be based on the products we have got and their contribution,” he said.

“We are really working on more a quarterly base through the year and that will give us a better indication as each quarter unfolds about things like supply, sales, demand and stock levels.

“I would imagine we would be somewhere around last year. We will lose a bit with i20, gain a bit perhaps with Elantra and Tucson. Up and down.”

The i20 light hatch was once the top seller in its segment but was dropped from the line-up last year after HMCA determined the new-generation Turkish-built version would cost too much to import to be competitive in Australia.

Its ageing Accent stablemate is now Hyundai’s sole offering in the segment.

Mr Grant praised his predecessor, Mr Elsworth, who resigned late last year to spend more time with his family, and added that he would not deviate too far from the company’s plans for ongoing growth.

 center imageLeft: Hyundai COO Scott Grant.

“John made a terrific contribution and I was very happy to have had some time with John before he retired,” he said.

“Really, (we are) just trying to move the same plan forward. And we are trying to maximise the opportunity for us in this market. That’s really all I am trying to do. Keep the team together, keep us moving forward, keep the dealers engaged.

“To launch new products … and maximise the potential of those products, because I think we have great potential across the brand and each product as it comes to market moves us forward another step. Continue the slow but steady growth.”

In terms of identifying areas of Hyundai’s business that require attention, Mr Grant said there were no glaring issues with the car-maker’s operations, and highlighted new and improved product as a way to attract new customers.

“I don’t think there is anything that you might call broken or in need of attention,” he said.

“I think the business is in great shape. Our opportunity is to bring vehicles to the market, to the dealers initially, then the customers so that they can perhaps open their mind and consider a Hyundai. There are still a lot of people that haven’t really had a Hyundai experience so far.

“Obviously we are one of the growth brands in this market. It is a heavily competitive market here of over 60 well-known automotive brands all competing in a 1.1-million car market. It doesn’t really make a lot of sense in some ways. But it is a consumer-driven market so only the best survive.”

Despite major efforts in the area of aftersales service, Hyundai unexpectedly fell in its JD Power Customer Service Index ranking last year, slipping below the industry average to sixth place, while sister brand Kia jumped up into fourth spot from ninth in 2014.

Mr Grant said customer and aftersales service would continue to be a priority.

“We have got a very strong iCare program in play. We like to pride ourselves on customer first in many ways,” he said.

“We are very focused with our own internal call centre to support customers and dealers to provide the fastest, best quality information possible. We are continuing to invest in the CSI area. I don’t think there will be a change there.”

Responding to claims that some dealers have complained about having an over-supply of stock, Mr Grant said Hyundai keeps a close on eye on stock levels and engages regularly with the network.

“It’s not an issue anymore now than at any other point in time,” he said. “The level of dealer stock is always something we are aware of. It is something we have in our computer system, so we have great visibility of dealer stock as well as our own stock so it is a matter that we monitor and we can manage and we work with the dealer council closely on programs and policies and things like that.

“Hopefully you’d hear this from dealers as well but we try to be as collaborative as possible.” In terms of brand perception in Australia, Mr Grant said every new product Hyundai launches is helping to push the company away from its previous budget-focused brand image.

“We see Hyundai evolving into what we coined ‘modern premium’, which is an evolution from a value-based brand we have been historically.

“I think the product is leading that charge and leading that evolution of the brand. Santa Fe, Tucson, these products are moving the brand from there to there. The brand is always led by the product.”

Mr Grant said gaps in its product line-up included in the utility and city SUV segments and denied that it need an injection of sexier product in the form of something like a high-end sportscar to improve its image.

He praised the existing product offering, while acknowledging the challenges of operating in the ultra-competitive Australian new-car market.

“The reality is we have a pretty good stable of products to offer the market right now and it is a matter of them developing. With every product introduction, we are moving the product and the brand forward another level, another notch every time,” he said.

“But the nature of a competitive landscape though is that so is everyone else.

As we are moving forward, so is everyone else. The consumer requirements and some of the drivers in the market and technology introductions such as Apple CarPlay and so on will revolutionise the way people use their vehicles.

“So as much as we are responding and moving, equally the market and consumer requirements are changing so it is a constant evolution. We are up for it we are having a crack.”

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