Hyundai plans to double sales

Analysts believe Hyundai will achieve its objective of doubling annual UK car sales to around 80,000 within three years by injecting money to finance price cuts and special offers.

The target is more than 3% of the market in 2008 and its share grew from 0.35% (volume 7,109) in 1990 to 1.47% (37,611) last year.

This month, the manufacturer took control of UK distribution and formed Hyundai Motor UK, part of Hyundai Motor Europe.

HMUK replaces Hyundai Cars UK, a subsidiary of RAC plc, bought this year by Aviva plc, owner of Norwich Union Insurance.

Ray Pope, HMUK managing director and finance director of the old company, says: “We can now invest more money and time into ensuring we have one of the country’s best car retail networks.”

One analyst says: “Hyundai’s products are improving, and so is its brand value, but South Korean makes still have relatively low appeal in Europe compared with, say, VW and Renault.

“That makes price-cutting the most likely way to increase sales, especially as Hyundai already offers a five-year warranty. Doubling market share and sales is certainly feasible.”

Another analyst says: “There is likely to be more promotional activity. Hyundai now wants growth, whereas Lex/RAC was more interested in short-term profit. Hyundai will become more aggressive, putting more pressure on European volume manufacturers, especially Fiat.”

HMUK plans to publish a strategy plan before the end of August. This is likely to include the launch of a recruitment drive for more sales outlets. HCUK had planned to grow from 152 main and nine satellite dealerships to 165 and 12.