Hyundai is at the forefront of bargain motoring, offering some of the cheapest new cars available today. The increasing popularity of entry-level models is no doubt helping Hyundai’s growth, especially in eastern European markets.

However, with so many automotive rivals vying for market share, Hyundai may not have the resources needed to become a mainstream manufacturer.

Hyundai has opened a brand new headquarters, a move it hopes will mark the next phase of its expansion into Europe. The new European HQ is based just outside Frankfurt in Germany, and also houses the Hyundai research and development centre and the Hyundai design centre.

The new centre is a sign of both the importance of the European market to Hyundai, and its commitment to it. In particular, it is the development and design functions that are best located in Europe. For years, Japanese manufacturers such as Toyota and Honda had a small loyal following because of their products’ reliability, but the styling lacked the flair that European motorists demanded. Toyota then designed its Yaris supermini in Europe and had an instant success on its hands.

The Hyundai centre will therefore have chassis and engine test and evaluation capability, a modelling studio and indoor and outdoor vehicle presentation, as well as the obligatory sales and marketing functions.

Entry-level models such as the Getz are no-nonsense vehicles that are cheap to buy, cheap to run and offer surprising levels of space and practicality for such a small car. As a result, Hyundai is planning to build a vehicle manufacturing plant in eastern Europe, taking advantage of lower costs and expanding markets.

Hyundai doesn’t have the same reputation for reliability as the likes of Toyota just yet, and it operates at the lower end of the market. Its products appeal to the more budget-conscious markets in eastern Europe, notably Poland, whose expansion has led many established European manufacturers to focus resources there.

Nonetheless, the UK is one of Hyundai’s most successful export markets, and success there has helped the company become the third largest Far Eastern vehicle importer into Europe. The real question for Hyundai is whether it has the resources to become a mainstream manufacturer. With so many rivals vying for space, many of whom are more established and have stronger brand names and images, Hyundai may only go so far.

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