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Hyundai reveals plan to keep on climbing

Date: 25 January 2016   |   Author: Guy Bird

Back in 2009, Hyundai was the 23rd-ranked UK fleet car brand with just 7230 units sold. By the end of 2014 it was in 10th spot with more than 42,000.

As 2015 ends, the numbers are still looking up, with circa 46,000 fleet units predicted on the back of the still strong i30 (12,705 sales to the end of November) and the recently launched Tucson, which replaced the ix35 in September (Hyundai's 2014 top fleet seller).

The new crossover is expected to shift 3000 units to business in 2015 and 10,000 in a full year. As Hyundai fleet director Martin Wilson puts it: "Three years ago Ford didn't take us seriously - we were the new kid of the block. Now Ford, VW and GM are trying to take business back off us. We're an acceptable brand."

Wilson explains why the transformation has occurred: "Firstly, our whole-life costs are fantastic and have been for a few years. Secondly, the cars look great now and the business case is good for the procurement manager with a five-year unlimited-mileage warranty."

Keeping all those new customers happy is tricky, and Wilson concedes that "historically, we haven't been particularly good with renewals". However, he adds that customer retention levels are better: "Now we measure it on every level from PCPs [personal contract purchase] to Motability.

It's improved dramatically in the last four to five months. For Motability it was 35%, now it's 45% and we're aiming to get to well over 50% by the end of the first quarter [of 2016], which I think we'll do. It's about making sure the dealers have the right contact management with the customer, [and] our own contact management within Hyundai five months prior to renewals, and also having the right information. The first contact can't just be: 'Are you coming in again?' We have to be equally good at every touch-point."

Having made such major sales leaps recently Wilson accepts it is harder for Hyundai's sales force to keep up the momentum, but he still sees gaps in the market: "We've seen huge changes in volume, and while we can't keep that huge bounce all the time we can focus more on end-user business, much more on the leasing sector and salary sacrifice and the public sector. There's genuine incremental business for us."

Rental business is still Hyundai UK's biggest fleet segment at about 15,000 units, with end-users making up 10,000, Motability 9000, public sector and salary sacrifice 7000, and small businesses 5000. Could such a large part of its fleet sales in such a historically discount-sensitive part of the business be a problem? "We have to be careful and already control some through buy-back," says Wilson. "Everyone gets pressure for monthly numbers, but the key for me is having all the sectors delivering the right volume. For instance, we've changed our structure internally to make sure we have more concentration on both leasing and Motability. It's not just about having the right offer - it's about the right training for our dealers, and the right marketing."

Talking of dealers, Wilson says Hyundai has 32 fleet-savvy business centres within its UK network right now and suggests that number will probably go up to 35 in the near future, but not much higher. Alongside sponsorship of events of such cultural diversity as the Tate Modern commissions and the UEFA European football championship, as well as competing in the World Rally Championship plus offering a ready-to-buy fuel-cell SUV (see below) beyond its decent regular product range, Hyundai UK occupies an incredibly different sales and brand space to a decade ago. If the determination of its fleet boss is any guide, it's a space Hyundai looks set to stay in too.

Fuel-cell manoeuvres

Hyundai, and more recently Toyota, are the only mainstream makers to offer fuel-cell cars in the UK. The adapted ix35 is a pricey £53,105 (after grant applied) but for that you get a hydrogen-powered SUV able to create its own on-board electricity to drive the 136hp-equivalent motor up to 100mph and 369 miles, emitting only water vapour from its exhaust.

To drive, it's just like a regular ix35 bar the slightest feeling of sustained momentum after you take your foot off the accelerator, but that's easy to get used to. Getting used to almost no UK hydrogen filling stations might be harder. Currently, there are about 10, but the Government is targeting 65 outlets by 2020.

Hyundai UK expects to sell 25-30 fuel-cell cars in 2016 on both lease and outright purchase. Fleet director Martin Wilson says its experience has been positive: "Two fleets looking at fuel-cell are now considering Hyundai for their wider fleet as well.

"People are intrigued by the technology and amazed once they drive one. It also gives us kudos within the business community, that we are at the leading edge of technology, there to buy now."