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Hyundai takes back HCUK

Hyundai’s 160-strong dealer network is waiting to be told who is to head the Korean carmaker’s UK operation from next month.

Control of the distribution of its new vehicles and of its retail strategy will switch from Aviva-owned Hyundai Car UK (HCUK) to Hyundai Motor Europe on July 1, earlier than planned.

Although most of the 130 staff based at the head office in High Wycombe and import centre at Tilbury are expected to transfer to the new business, HCUK managing director David Walker, sales director John Lawrence and operations director Claire Balmforth will not be staying on.

Replacements are expected to be announced within the next two weeks.

Under the direct ownership of HME, based in Frankfurt, Germany, Hyundai will be driving to increase its UK sales in its aim to become a top five global manufacturer by 2010. UK market share stands at about 1.5% and Hyundai, the world’s seventh-largest carmaker, sold 202,087 vehicles globally in May, up 189,644 (6.6%) on a year earlier.

While 2004 was the company’s best ever year in the UK with a 17% sales increase to 37,600 units in an otherwise flat market, HCUK has come under fire from a number of its franchised dealers over its strong-arm tactics.

Lawrence, in particular, was accused of sanctioning a two-tier system where some dealers were said to be on more favourable terms than the standard 6% dealer wholesale margin and that target-related bonuses varied. It was alleged that a selection of dealers had access to special terms that allow them to sell cars for less than most other Hyundai dealers have paid for them. HCUK vigorously denies these claims, saying all dealers are subject to the same bonus system, and that some dealers simply choose to trade more aggressively.

Nonetheless, Hyundai’s performance is on track for a 5% market share by the end of the decade, bolstered by a stream of increasingly competitive products such as the Santa Fe SUV. The change of control comes after the acquisition of HCUK’s parent company RAC by Aviva.

A spokesman for HCUK says that while the transfer to manufacturer control of Hyundai’s star European player was inevitable, the timing had been pushed forward by the Aviva deal.

As a parting shot, Walker, who says he is disappointed to be leaving after having run the franchise for 12 years, says: “During RAC plc’s (formerly Lex Service plc) period of ownership, we have significantly grown the Hyundai business in the UK. All the team at Hyundai are proud to have created a very successful business which is in very good shape.”

He adds that the new arrangement will see a renewed commitment to the development of “the capability and performance” of Hyundai’s UK retail network.

Existing owners’ warranties are unaffected and Hyundai remains the only carmaker in the UK to offer an unlimited mileage fully transferable five-year warranty across its entire range.

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