Hyundai: We’ll always be more premium than Chinese brands

Hyundai Motor Company Australia chief operating officer John Kett says the days of cheap Hyundais are long gone and that the Korean car-maker’s vehicles will always justify their price premium over new value-laden Chinese competitors.

As most car companies hike their prices to cover increasing production and shipping costs, established marques are also facing increasing competition from Chinese challenger brands like BYD, Chery, GWM-Haval and MG.

Speaking at the launch of the new Hyundai Kona Hybrid and Electric, Kett drew parallels with the cheap and cheerful early period for Hyundai in Australia, when the Korean brand began a price war with Japanese brands in the small-car market in the mid-1990s with the $12,990 Hyundai Excel.

He said the company could not have been profitable enough to invest in the plethora of more advanced new models released since then, had it sustained such price levels.

“We couldn’t have been profitable. We wouldn’t be able to afford the programs if we stayed where we were on pricing,” he said.

Even far more recently than the bargain-basement Excel period, Kett says Hyundai Australia was still attempting to maintain low prices – but at a cost.

“We’ve gone from the 100,000 units in 2016, when we sold them to everyone, you know, left the keys on the side of the road and then you just tell us what you want to pay,” he joked.

“That made it challenging for us.”

Hyundai is on a very different path now, said Kett. Positioned above the value players at higher prices, he said it remains profitable enough to develop ever-advancing levels of technology as part of a more sustainable business model.

“I think we’ll always be a premium to the Chinese. We’ve just got to come up with the technology to keep ahead of them, to recognise that our premium is worth it to some customers,” he said.

“Our benefit is that the pace of change in our portfolio is quite significant, and I think we’re going to have to keep doing that to justify the pricing position we have over our competitors. Time will tell if the technology we will bring is worthy of the premium we charge.

“[But] Our benefit of the pace of change in our portfolio is consistent with and worthy of the premium we charge.”

From a height of 101,555 sales in 2016, when it was the third most popular brand behind Toyota and Mazda, Hyundai now lies fifth in the Australian market behind those Japanese brands as well as Mitsubishi and sister brand Kia in 2022, and Ford and Kia so far in 2023.

To October this year it has sold 63,578 vehicles, for 6.3 per cent share of the market, placing it just behind Kia (64,770 sales, 6.4% share).

Excluding SUVs and commercials, Hyundai moves up to third position based on passenger car sales alone, with volume of 20,235 – behind Kia with 26,588 and Toyota with 27,117.

So while it clearly needs a ute to compete with the like of Toyota, Mazda, Ford and (soon) Kia, Hyundai is also third in terms of SUV sales with a total of 41,160, behind Toyota (80,257) and Mazda (55,771).

Hyundai also has the highest share of the small-car market, with the Hyundai i30 finding 18,013 homes this year for a 35.9 per cent share of the segment, ahead of the Toyota Corolla (16,122 sales, 32.1%) and Mazda3 (7860 sales, 15.7%).

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