The head of the UK distribution arm of SsangYong tells Dave Leggett that he expects the Korean brand to double its UK sales in 2015, boosted by the impact of the upcoming small SUV, Tivoli.
The UK sales numbers are small (first ten months cumulative 1,342 units) but SsangYong UK has doubled its sales so far this year versus last. Paul Williams, CEO of SsangYong Motor UK, knows that he’s in the results business and he’s upbeat. “Yes, the numbers are coming off a low base, but we are very pleased to be getting the kind of growth we are achieving,” he says.
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Williams paints a picture of a niche brand that is growing in reputation, with the right product strategy to reinforce positive brand values for customers in its segments. And he reckons that the perception of cars from Korea has changed, for the better.
“We have good dealers, honest product – that does a job. And we provide value, but it’s value with good standards of quality. Being Korean, in today’s world, means good quality and reliability. And, by the way, we have the best warranty [five years] around.”
SsangYong UK recently announced the appointment of ten new dealers and Williams recognises the importance of building the right kind of network.
“We’ve got more dealers, better dealers and we have got better at what we do, as a distributor, at understanding the market and what we need to do. We know what works and what doesn’t. We are getting wiser, smarter and more effective,” Williams maintains.
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By GlobalDataOn the product side, SsangYong offers a range that straddles a number of niche segments – large SUV (Rexton W), mid-size SUV/crossover (Korando), pick-up (Korando Sport) and large MPV (Turismo – successor to the outlandishly styled Rodius). Williams notes the brand is growing volume in all its model lines, but the latest Korando has been especially important.
“Korando has been a key model and has been well received in the market,” he says. “It’s such an improvement on what came before and a car like that can really start to change a few perceptions.
“We have doubled our overall brand sales, this year over last, and we’re extremely happy with our progress, with our new dealers and with the products that are gaining wider market acceptance. We have sold more of all the model lines – Korando, Rexton W, Turismo, Korando Sports pick-up – and that’s very encouraging.”
Williams believes that SsangYong’s strength in the UK is based on having good product that is well priced and that the brand has had something of a tailwind because its products sit in market segments that have been performing strongly.
“In addition,” he says, “if you are a brand that is not particularly well known, it’s easier to expand your sales in a segment that is growing. Korando has been in a very strong segment with some other strong sellers and that’s been very positive for us. Turismo is in the large MPV segment that has been exited by some, so we’ve been able to grab a big share there, around 40%. Rexton competes with used cars rather than new ones, and the used car market is very buoyant.”
He’s also excited about the new small SUV coming next year. The Tivoli (X100) will be a B-segment compact SUV competitor for the likes of the Renault Captur and Ford EcoSport and that has also been a segment that has seen well above average growth in the UK. “Of course, we are excited about prospects for that vehicle. We expect to double sales in 2015 and that new model will be a very big contributor,” asserts Williams.
Our conversation turns to the UK car market in general. Williams is a seasoned UK car market campaigner (among his past stops was a spell with Mitsubushi UK) so his perspective is an interesting one.
The UK car market is heading for 2.5m this year, but Williams believes it’s been pumped up way above where it should be. “There is clearly plenty of froth, it should be more like 2.2m in a normal year,” he maintains.
“The UK car market has been very strong for the past few years. We have seen the major players, in particular, using PCP [personal contract purchase finance packages] product to keep the market going because of the pressures they have been under in the wider European market.”
He also believes that the recent over-performing nature of the UK car market will become increasingly difficult to sustain, with the likelihood of contraction in 2015. The big players in the UK car market, he believes, will eventually find that they are unwilling to keep unprecedented incentives in place and will ease back as soon as they can.
“I think the UK car market will fall back in 2015,” Williams says.
“At the end of the day, they’ve [the big players] had to do what they’ve been doing because they want to keep factories busy. There are some big pressures at work given the overall economic picture in Europe over the past few years and massively under-performing car markets in places like Spain, Italy and France. In Britain, the economy has been better, employment has held up, interest rates are low and credit is available. We have the best acquisition methods in the world here, in terms of getting people into new cars. The circumstances have allowed it to happen.
“The question longer term will be: if the European market bounces back, then will the manufacturers pull back from pushing cars into the UK marketplace? For sure, the level of incentives thrown at the UK market has been unbelievable and unprecedented and I doubt the big players will want to carry on with that for a moment longer than they have to.
“For the UK car market over the next few years, it won’t be simply a matter of the inherent strength of the UK economy, but things will be heavily shaped by how the market in the euro area is looking and how much the UK’s role as an absorber of volume is needed in relation to the wider regional picture.”
See also:
SOUTH KOREA: SsangYong X100 to be called ‘Tivoli’
COMMENT: UK car market set to plateau
