Next year’s new Hyundai i20 will be the last car from the brand which people will buy primarily on price, says UK president and managing director Tony Whitehorn.
“We are not going to lose the value side of things, but value does not have to mean cheap,” he added, speaking to just-auto at the launch of the new i20 in Spain.
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“There is a ceiling for budget brands in terms of volume and we are looking at eventually selling 100,000 cars a year in the UK.”
The new five-door i20 – based on a larger, all-new platform but powered by the same engines as the outgoing model – comes to the UK just after the turn of the year and will be followed a few months later by a three-door i20 coupe, which will introduce new 1.0-litre three-cylinder turbo petrol engines delivering 100 or 120 horsepower.
There will eventually be a third model in the i20 range, widely expected to be a small SUV.
Hyundai is currently in the throes of introducing 22 new or updated cars in Europe by 2017 and one of the most significant will be the next-generation ix35 next year.
“It will be the start of a step change for us, certainly in terms of design,” Whitehorn says, adding perception of the brand is already changing.
“If we look at the old i10, 30% of our sales were the entry-level model, but with the new car it is only 5%,” he said. “Across Europe, average transaction prices have risen by EUR1,600 (US$1,985) per car.
The new i20 will maintain or even increase that because of the greater range of advanced technology features it offers.
A lane departure warning system, cornering lights, front and rear parking sensors, automatic windscreen de-fogging, heated seats, a heated steering wheel and the first signs of connected car services in a Hyundai in Europe – either through a docked smartphone or a touchscreen multimedia system – are now available.
There is also a greater range of colour and trim choices from a brand which has previously kept options to the bare minimum to reduce manufacturing time, complexity and cost.
“We have gone from being a challenger to mainstream, but that has raised expectations,” says Whitehorn.
“We are trying to make all those things that you thought were inaccessible accessible and personalisation is important, but it has to be restrained. The model we work to is very much about immediacy and therefore we have to restrict the amount of options.”
Hyundai’s approach to personalisation is to offer specific cars for the markets where they are sold, Whitehorn adds.
“Our product is bespoke for the markets. The i40 is not sold in America or Korea. The i10 in Europe is different to the one in India.
“But to do that the factories have to run at 100%. If [our factory in] the Czech Republic makes 100,000 cars a year we lose money. If it makes 200,000 we break even. At 300,000 we are profitable.
All our factories are currently running at 99% capacity and in 2013 the Czech Republic operated at 103%.”
Hyundai sold 412,000 cars in Europe in 2013, including 78,000 in the UK. This year the figures will rise to 420,000 and 82,000, and in 2015 to 435,000/90,000, but there are still problems of awareness, says Whitehorn.
“Our biggest challenge is not even being considered. The level of awareness is a major issue. We’ve got a very good conversion rate, but there are not enough people going into the funnel at the top.”
