03 Oct 06
The phony war is over. Hyundai may be having a quiet time at the moment - 'a year of consolidating our European operations,' according to Hyundai Europe vice-president Gerry Dorizas - but it's the calm before the storm.
The Korean company's European sales rose by 218% from 110,000 to 350,000 vehicles, consisting of a mix of no-nonsense cars like the Accent and Getz and a wide range of MPVs and SUVs. To move up to the next stage, though, Hyundai has got to tackle the Europeans head-on at what they do best: making compact family hatchbacks like the Astra and Focus.
'We have new products coming out and we have to start becoming European,' says Dorizas. 'We have global strategies, but we are trying to act local.'
The catalyst is the Arnejs, the concept version of the car known as FD. That will turn into a production car in 2007, and will be followed by the full European sweep of variants - CC, SW and, later, MPV - as well as other mass-market models and a range of diesel engines (and maybe, in the long term, fuel cells).
Hyundai's habit of offering confidence-inspiring warranties has helped establish its reputation for reliability, but it needs to get smart in other aspects of the car business now that it's heading into the toughest bit of the world's toughest car market.
A return to the World Rally Championship in 2008, in a car based on the Arnejs, will help make sense of claims that Hyundai is a sporting brand.
'We are also working on the dealer network and the brand image and brand awareness. Our main emphasis is on the network. We have to think about used cars, fleets, residual values. Our ambitious target is to double our sales, to 4% of the market by 2010-11. We are also building a production site in Europe (in the Czech Republic), starting at 200,000 units by mid-08, then 300,000 by 2010-11. This would solve our problem that we are selling 115% of our capacity, and solve problems of currency fluctuations.'
Sister company Kia is not, however, about to let Hyundai re-assert its dominance without a good fight. Having replaced all its models in the last two and a half years, Kia's planning to sharpen up its image by making good use of its new star signing, former Audi and VW designer Peter Schreyer, who said at the show: 'We have ambitious plans and we are going to give our entire model range a new orientation.'
But Dorizas says: 'Kia's investment plan is already starting to pan out; ours will pan out next year. In the marketplace Hyundai and Kia are competitors. There's platform sharing and engine sharing, but we have to fight each other.'
Game on.
Hyundai Arnejs
Infinit G35 Coupe
Two years from now many of Europe's more expensive addresses will have a car out the front wearing an unfamiliar badge: Infiniti's.
It's Nissan's posh brand, in precisely the same way that Lexuses are upmarket Toyotas. Infinitis have been on sale in the US since 1989, and a few have made it further afield, but the brand makes its official European debut in 2008, including right-hand-drive versions for Britain.
Lexus hasn't exactly wiped BMW and Mercedes off the face of the Earth, so why bring Infiniti to Europe, and why now?
'As a car guy, because they're great cars,' says Brian Carolin. But we're not asking him because he's a car guy; we're asking him because he's Nissan Europe's senior vice-president of sales and marketing. 'In 2008 there's a window of opportunity to introduce the next range of vehicles pretty much all at the same time. We believe that with this range of vehicles we can profitably enter into the premium segment.'
He doesn't shy away from the parallels with Toyota and Lexus. 'It has taken Lexus 15 years to establish itself in Europe. Our business model will be different. We want as much as possible to separate Infiniti from Nissan. That's very important in this sector, and that's not what Toyota did with Lexus initially.'
He wants the dealers to be a select band, physically separate from Nissan outlets. 'We need exceptional levels of customer service.'
The cars will all be built in Japan, at the same plant that currently builds Infinitis for the US market, and European HQ will be in Switzerland. 'It's a perceived home of luxury and it's one place in Europe where you see a lot of Infinitis,' says Carolin.
'One early appointment for Infiniti Europe will be a marketing person. I know nothing about the luxury segment and it's very dangerous for guys like myself to try to build the marketing platform. It would be very arrogant of me to pretend I know the customers or their buying motivation, or how to talk to them. That's why we are going to hire some very good people and put them in Switzerland with a blank sheet of paper.
'The whole brand proposition is built around very vibrant design combined with exhilarating performance. The cars are very striking. The next generation takes that a stage further.'
There will be V6 and V8 petrol engines when Infiniti arrives in Europe, with a V6 diesel following in 18 months. And there won't be any Lexus-style hybrids: 'We will have the technical ability but the business proposition has got to be right.'
The final decision on what that range will consist of won't be taken until next spring, but it's likely to involve the replacements for the current FX, G and M, and maybe a couple more.
The full line-up will be at the Geneva Show in March 2008, with sales starting before the end of that year. 'Suffice to say that at Geneva in 2008 I can promise you a wow factor,' says Carolin. 'We will be booking a big stand.'
