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GERMANY: Long warranty boosts Hyundai sales in UK

By just-auto.com editorial team | 10 September 2003

Hyundai Car UK is heading for its best-ever sales year following the introduction of its unique five-year warranty across its vehicle range.

Managing director David Walker said at the Frankfurt motor show the company was outperforming the UK market where sales are running level with last year.

He is hopeful of hitting 31,500-32,000 sales this year, the biggest year ever for the company in the UK - and with only one new model launch in 2003.

The big Terracan off-roader was launched a few months ago to bring the Hyundai range up to nine models. Walker said: "It is doing as well as we hoped. The Terracan is one of the those vehicles which is exactly what it says on the box, a big, tough off-road vehicle and we are hitting our target customers, people who would otherwise be looking at second hand Land Rover Discovery."

Doing particularly well for Hyundai Car UK is the Getz supermini which accounts for around 40% of sales while the Coupe is still performing well in a market segment which is down 26% this year.

Although Hyundai's five-year warranty has been a useful sales tool, Walker said there was still some work to do on improving residual values in the second hand market. "We would like to do more to get the warranty message across but we do not have the big budgets for large advertising campaigns. We have a large model range and we have to spread our marketing budgets accordingly," he added.

"We are working particularly hard on fleet sales and with vehicle rental fleets, a market we pulled away from a couple of years ago. But if people can now buy a second hand Hyundai with a full manufacturer's warranty still in place it can only help our efforts."

Vehicle supply is still a headache in terms of getting the right variants for the UK. Walker said: "We do pretty well at predicting the numbers of models we want, the problem is getting the right variants in terms of colour and specification. It is difficult with such a long supply pipeline from South Korea."

This is why Walker believes it is important that Hyundai establishes a factory in Europe for its volume selling vehicles. "The number of sales are building," he added. "We have to make sure we can meet the growing demand in the future."

A decision on a European factory is expected to be made within the next 12 months, most likely it will be built in Eastern Europe.