This month contributing editor Steve Banner spent some time with Tony Whitehorn, managing director of Hyundai Motor UK to find out how the company is adapting to the introduction of its first light commercial vehicle for seven years.
You’ve just launched the iLoad van, a rival to models such as Volkswagen’s Transporter, Mercedes-Benz’s Vito and Toyota’s Hiace. What’s prompted you to return to the light commercial market after a seven year absence?
At present around 70 per cent of the cars we sell in Britain go to retail buyers; the rest are sold to fleet customers. We want to increase our presence in the corporate sector and one way of doing this is having a broad product range. In particular, we need to have a van available. However our strategy with iLoad is not to try to interest, for example, the big utility companies. We’re targeting small- to medium-sized enterprises; businesses that run no more than 50 cars and light commercials. I’m talking about the sort of firm that operates, say, 15 cars and five vans. My aim is for them to get all the vehicles they require through their local Hyundai dealer on a one-stop shop basis.
So what are you doing to help your dealers tackle the business market?
Five of them have already been appointed as corporate specialists and we should have a total of 10 appointments by the end of the year. Each one has to recruit an executive who will specialise in dealing with businesses and Hyundai is investing around £40,000 in each of the dealerships concerned to help them in areas such as marketing, prospecting and running demonstrators, including vans.
Where are the first five corporate specialists located?
Carlisle, Hinckley in Leicestershire, Milton Keynes, London and Motherwell.
How many corporate specialist dealers do you aim to have eventually?
About 30, but the timing will depend on how well our new strategy takes off. Longer term, as business builds, we’ll be expecting them to, for example, look at running a late shift in the workshop — from 6.00pm to 10.00pm say for a couple of nights a week — so that corporate customers can drop vehicles off for servicing in the evening and get them back the following day. Corporate specialist dealers cannot just think about the sales department. They’ve got to think about aftersales too.
How many dealers do you have in total?
We’ve got 132 and they can all sell and service iLoad. With one van in our line-up we’ve got no plans to set up a specialised light commercial network. If we end up with an entire range of vans, however, then we might. Longer-term I wouldn’t discount the idea of offering a separate van franchise to, say, heavy truck dealers, if sales really took off and that is what customers wanted; if they wanted the product handled by a specialist network in addition to the car network.
What happens if a prospective iLoad customer wants his van’s load area ply-lined or perhaps converted to refrigerated specifications. Will the salesman be able to help, or will he have no idea of what the customer is talking about?
He has a direct link to our central product department. It has specialists who can advise him, especially where bespoke conversions are concerned. We’ve already established links with certain converters.
As an alternative to HP can your dealers offer the sort of contract hire packages that are likely to appeal to corporate clients?
Yes. We put every single one of our dealers through a contract hire training programme last November. It’s been a real culture change for them because historically they’ve been a lot more used to talking to retail customers. Hyundai Contract Hire is in fact run by Masterlease under an agreement we have with them and they can always talk directly to the client if that’s what’s required.
How are Hyundai and its dealers setting about getting their message across to local firms?
They’re being emailed a personalised newsletter called Think Business aimed at people who are not dedicated fleet managers, but have responsibility for the fleet as part of their job description. The newsletter is tailored to meet the requirements of the recipient. If for, example, they click on a section entitled ‘corporate liability if you run a fleet’ then they’ll receive more on that topic in the next issue. The last issue contained something on the iLoad and if people clicked on that they’ll get more material on vans in the next one. There’s always a section you can click on if you’re interested in receiving an iLoad brochure. The inquiry goes to the dealer, who will then contact the operator and offer to bring the brochure round. He can bring a van round too. The whole idea is to build up a long-term relationship with businesses rather than rely on cold-calling on the telephone.
How many iLoads do you expect to sell this year?
Three hundred. The main model is the Comfort, but you can order the Classic too. It’s several hundred pounds cheaper than the Comfort but doesn’t have air conditioning. We’ve also got the Crew Van; a six-seater with a load area at the back. We’re already getting some orders from people who want to use Crew Van as their company car from a tax benefit point of view. I think we may also see some people who are currently running double cab pick-ups switching to Crew Van. The standard panel van is likely to account for 90 to 95 per cent of registrations this year but we’ve got the flexibility to increase the number of Crew Vans available if there’s the demand.
A 116hp 2.5-litre diesel powers iLoad but in theory there is no reason why you couldn’t offer a 168hp 2.5-litre diesel too. It’s already installed in the eight-seater i800, from which iLoad is derived. Spec up a 168hp iLoad with lots of goodies — satellite navigation, air conditioning, leather seats, alloy wheels and so on — and you could have a model that would rival Volkswagen’s Transporter Sportline. Would you think about going in that direction?
Yes, but only after we’ve established ourselves with the existing iLoad. We’d do it with Crew Van though, probably not with the standard van, and we’d have to wait and see if sales of the existing Crew Van take off first.
You’re selling iLoad with a five-year/100,000-mile warranty. How important do you think that is to your target audience?
If I were a van buyer doing a lot of local runs and I knew that I was going to keep my vehicle for five years then I would see it as an absolute boon. If you’re on local work then you probably won’t be doing more than 20,000 miles annually and so you’ll be within the mileage limit. Remember that a lot of tradesmen use their vans as mobile cupboards. They drive from their home to a local site, park their van there all day and take items out of it as and when they need them.
What about the service interval? It’s set at 10,000 miles and that’s far too short.
I’m delighted to inform you that we’ve just increased it to 12,500 miles with the agreement of the factory.
What opportunities do you have to expand the range by offering other products in addition to iLoad?
In the short-term, none. In the medium-term, however, then there could be an opportunity for us in the car-derived van market, maybe with something based on an i20-type platform (The i20 supermini is Hyundai’s Ford Fiesta/Vauxhall Corsa rival – SB). We’d have to do a lot more research into this area though.
The iLoad is assembled in Korea. What’s the situation with pricing now that sterling has lost so much of its value on international currency markets?
While sterling has dropped, the Korean won has dropped even more. In fact it’s fallen off a cliff so we count ourselves fortunate that iLoad is built where it is. As a consequence we’re not affected by the strength of the euro against the pound. But while our manufacturing base is fine, transportation costs are going up, so I don’t know whether we’ll be able to hold our prices for the rest of this year. If we can maintain a pricing advantage, however, then that’s certainly what we’d like to do.
Hyundai has a history of dipping in and out of the British light commercial vehicle market. Are you here to stay now?
Yes. We’re in it for the long term, no question about it.