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Hyundai plans for life after scrappage

Hyundai has done well out of the scrappage scheme, but understands it is not a business model for the long-term future of the franchise in the UK.

The South Korean franchise has taken on 20% more staff after the popularity of its i10, i20 and i30 models on scrappage sent the brand’s sales soaring by 322% in August.

In September sales were up 122% on the same time last year.

Tony Whitehorn, Hyundai UK managing director, realises this massive boost in business is not going to last forever.

He told AM: “This situation is unprecedented and I don’t think there’s ever been something introduced that has had such a dramatic effect on the industry.

“Scrappage is a peak for us and we cannot justify a business case on what has happened over the last three months.”

Hyundai dealerships have been inundated with incremental business coming through showroom doors,
but Whitehorn does not want the network to lose focus from retail sales or let standards slip.

Whitehorn said: “That’s the real concern. Dealers won’t make as much money on the scrappage sales as they will on retail.

“If there are customers sitting there in front of you waiting to be dealt with, other retail customers from industry databases or through prospecting might not come as high on the agenda.”

Whitehorn is “fairly pleased” with Hyundai’s latest NFDA dealer attitude survey results, but admits there are
still some areas where the South Korean manufacturer could improve.

He said: “What’s more important to us is the customer relationship and our customer satisfaction results are improving despite having a lot more customers coming through the showroom doors.”

Hyundai has options open as to how it will deal with the end of the scrappage scheme, but is keeping tight lipped on what it has planned.

Whitehorn said: “We took an idea to the network and they’ve actually come back to us and suggested
something even more extreme which we’re very excited about.”

Whitehorn could not reveal more detail on what the sales initiative would involve, due to worries that competitors would copy the ideas, but did say it would work as a complement to the existing scheme and would help bring it to a “natural end”.

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