One of the catalysts for Hyundai’s stunning growth was the scrappage scheme ushered in by the UK government in 2009 to stimulate the industry.
A customer could hop out of his tatty old banger and buy a generously kitted, shiny new car with £1000 knocked off via the scrappage scheme. It was possible, for example, to get into a Hyundai i10 for £5k or an i30 for £8k.
Hyundai was one of the big winners from scrappage, although it would be wrong to assume the manufacturer simply lucked in. The company was prepared, and as UK boss Tony Whitehorn puts it: “We grabbed the opportunity with both hands. We fulfilled customer orders when other manufacturers were running out of stock.”
Hyundai UK’s annual sales rocketed from 28,000 in 2008 to 61,000 in 2011, and although the growth curve has become shallower it continues to show an upward trend that maintains the UK as the second-largest European market.
In 10 years, Hyundai has edged away from its former brand image, creating cars that are much more appealing to European tastes. Its products can no longer be regarded as ‘cheap’ in terms of either quality or price point; ‘value for money’ is now the watchword.
Whitehorn says: “When you want to move a brand, you have to start with the products. That’s the key. The products we have today are unrecognisable compared with those we had 10 years ago. The products move more quickly than the brand does and the biggest challenge is for the brand to catch up.”
As the manufacturer cycles through replacements for its current, well-received model range, it faces even greater challenges to attain its sales targets.
It is pushing forward in many areas, chasing driving dynamics that are on a par with the European brands to create more emotional resonance with customers, establishing the upmarket Genesis sub-brand and ploughing sizeable resources into electrification and hybridisation.
It is also pioneering new ways of selling cars, such as the Rockar Hyundai digital dealerships in the South East, and Whitehorn says lessons learned from those establishments will be fed back into the main dealer network in years to come.
Whitehorn predicts that the car industry is about to enter a period of major transformation, with more customers embracing alternatively fuelled vehicles, encouraged by governments who will increase tax on diesels and petrols.
He’s confident that Hyundai will be ready. If that’s the case, it could be like scrappage all over again in terms of boosting the company's sales towards the 5% market share it covets.