Hyundai predicts auto market recovery

New-vehicle sales in Australia could take more than three years to recover to pre-coronavirus levels.

Research and future planning by Hyundai Australia paints the dismal picture even as it prepares for the biggest new-model onslaught in its history, with 18 new arrivals planned over the next 18 months.

Hyundai’s original plan for the roll-out was to have the hydrogen-powered Nexo in showrooms by now, but it has been delayed and the first of the arrivals is the all-new i30 sedan that previews the chassis and mechanical package that will sit under the next Hyundai i30 hatchback.

It will be followed in the fourth quarter by the company’s new heavyweight SUVs, the redesigned Santa Fe and the giant American-centric Palisade (pictured), with pocket-rocket i20 N now timed for the first quarter of 2021.

The model overhaul is part of a plan to transform Hyundai’s image away from being just a bargain brand, but chief operating officer John Kett admits that could take longer than expected because of the coronavirus.

“When will we seen another million-unit market? Obviously it’s not this year,” Kett tells carsales.

“It won’t be next year, and I don’t think it will be the year after. My feeling it is perhaps in 2023.

“But we have no idea what 2021 and 2022 will look like.”

Kett says Hyundai’s move away from ‘$990’ pricing began last year with the new Veloster coupe and continued in February with the Accent-replacing Venue city-SUV, which was launched at $19,990 but is now priced from $20,190.

“We already punch above our global sales rate in Australia. We need to make sure we’re proud of what we have. We’re assessing what’s our fair share of the market.

“I don’t think anyone can afford to be the $990 car company any more. I think, economically, it’s a difficult proposition to get down to $19,990.

“We should be a little more proud of what we achieved. We’re continually in a situation where we’re self-assessing our negativity.”

Kett says the recovery from COVID-19 will inevitably include price rises as exchange-rate movements and a reshaping of showrooms is passed on to consumers.

In the case of Hyundai, the plan is to inject more quality, value and style into every newcomer.

“It's a chance to reinforce that our cars are worth paying for. Now it’s down to the tin tacks of just how far we can move. We’ve got a pretty loyal customer base that we’ve evolved, and they are evolving with us.”

Even so, he knows there is considerable risk for Hyundai.

“We cannot lose the accessible price pointing that we have. It’s just going to be a little more expensive,” he said.

“It’s so dangerous to think you can shift your brand radically. We’ll be testing ourselves … on how we are positioned for every wallet.

“We’ve got to work our way through it. People have demonstrated they are willing to pay more for their cars, just with the shifts in segment.”

Looking at Hyundai’s results in Australia over recent years, Kett says the company lost focus on its own homework.

“We started to fixate ourselves on what our competitors were doing. We were almost operating on that, ignoring the market size and scale we had.

“What we have started to do was to take more time looking at every brand, and segment and model. We are trying to piece together what they do well, and how to replicate that.”

Kett admits the upcoming models will be more expensive, but is working to balance the equation for shoppers.

“As we go through this new portfolio we are going to be challenged around the price. I think we will see some price pressures on us.

“We have to have higher content. And if the economy starts to move up, then there will be less pressure on us.

One of the fundamental changes at Hyundai is a stronger focus on private customers, playing to people buying with their own cash instead of looking for cut-price fleet deals.

“If anything, our change in buyer type has forced a change,” Kett says.

“We have to stop the bleeding through fleets. As we shift and transition away from heavy fleets we need to prospect some new buyers.”

On the product front, Kett points to the Kona as a pivotal model.

“It has been the way to take the temperature for us in shifting to a more private-buyer type. That’s a priority for us.

“Kona is incredibly important for us. We need the Kona to work. The work on Kona will set the foundation for the rest of the portfolio.

“I think all the models have their own stories. I look at all of them as if they are my children.

“The foundation for the rest of the SUV line-up is going to be built on the small cars. The rest of the line-up can tell its own story.”