Getting the strategy right: Ashley Andrew on Hyundai’s fleet plans
Four months after his promotion to Hyundai UK managing director, Ashley Andrew talks fleet with Martyn Collins.
How are you doing in terms of fleet this year?
“We have a smart growth strategy for fleet that’s about selling the cars in the right channels to end users on long cycles and strengthening residual values.
“So, we’ve got a new fleet director, Michael Stewart. Michael is building a fantastic fleet team, he’s recently brought in Tim Wright, who joins us from GM, and we are building the contact book in terms of UK companies.
“We’ve just gone into partnership with ROI, in terms of fleet management and fleet content strategy, and we are seeing more and more companies inviting us in, because of our alternative fuel option.
“Ioniq is the key consideration on company car policy lists, because the whole-life costs and the Benefit-in-Kind are very good and we have a ready supply of the vehicle now. Also, a lot of companies are seeing what’s in our portfolio, so they’re looking at the fact we’ve got Kona Electric, the fact that there’s an electric Ionic and there is interest in Nexo – from organisations who are part of the hydrogen infrastructure, and therefore they can get access to the pumps, but it’s a powerful proposition in terms of corporate responsibility.”
You’ve got a very complete range offering, are you finding this an asset when talking to business?
“Yes, exactly, and a lot of those meetings are about awareness.
“A lot of the visits that we’re having are being introduced by ROI, and the feedback we get is, we have a car in every segment – that’s how comprehensive the range is. We cover 90% of the market with our portfolio, and we can offer everything from essential needs users to user-choosers.
“It’s good from a PR point of view, it’s great from an HR point of view and for the financial directors, from a cost point of view.”
With Kona Electric, does it not frustrate you the amount you can sell, thanks to battery supply issues?
“Kona Electric has a 12-month waiting list. We’ve got over 2,000 people who have expressed interest but we haven’t taken a concrete order yet, because we’re not at a stage of opening production that far out.
“It’s a great problem to have, it’s a halo model for the brand and we’ve got a level of demand that’s fantastic. You’d much rather have that situation, because from a production and ramp-up point of view, as soon as we’ve solved that issue and when the supply comes, we’ve got advocates, we’ve got customers who’ve already left deposits – we know we can sell the car.
“We’ve put Kona Electric exclusively through our ‘Click To Buy’ sales model, and that means we keep the allocation centrally, but then we can allocate any car to the next person on the list. This has meant we can market it to both fleet and retail and simply provide the next allocation. Whether it’s B2B or B2C, it didn’t matter, because it was the standard price and, therefore, we didn’t have any priority in terms of the target customer.
“Kona Electric has been a great door opener for people to invite us to tender, because we also have Ioniq.”
What is your most popular fleet model?
“Tucson is the gravity of the brand, that’s where the weight of our volume is. Ioniq from a fleet point of view is fantastic, and this is the model that’s winning us an increasing number of end-user contracts, because we’ve got stock available.
“The fact that we can supply Ioniq from stock is what gives us a significant advantage. Plus, we’ve got plug-in, or we’ve got full-electric, or we’ve got hybrid versions.”
Is Brexit uncertainty hurting Hyundai fleet sales?
“With the uncertainty, what you do is plan for different scenarios, so you plan in terms of ‘what ifs.’ So, like several automotive manufacturers, we built inventory before March, so we had as much custom-cleared inventory in case there was a no deal.
“It [the current target date for exit] is now October and we know, because we did it for March, what procedures we need to follow. We’ll try to bring as much custom-cleared inventory in as possible for then. So, we are prepared whatever way it goes in October.”
What do you see as the key area of growth for Hyundai fleet sales?
“This year our key growth is true fleet. It is about building the relationships with the leasing companies and the end users. It is also about getting in front of the companies themselves and going through the product proposition – from not only the width of the portfolio – but also the whole-life cost position and alternative fuel option.
“We’re in a fantastic position because we can supply every powertrain, so there is political uncertainty, there’s market uncertainty, all in terms of which way the market will go. We’re in a great position, because not only do we have battery, we’ve got plug-in, a hybrid, we’ve got diesel, we’ve got petrol and we’ve even got hydrogen. So, we’re future-proofed and can give best advice – we can hedge against which way the market goes.
“One of our strengths was when during WLTP, we had a constant sea of supply – so we were very agile as an organisation. We get production from Korea, but we also get a high level from Czech-Republic and Turkey, so we’ve got the ability as an organisation, to move models as the market moves.”
Are sporty N-Line models having a positive effect on the rest of the Hyundai range?
“N-Line is a part of our core trim strategy moving forward, you get all the styling cues and the inspiration from the full-fat version – the ‘N’ – but you get that in terms of a trim level.
“A number of manufacturers have used that strategy, and it works well, because it gives the car an incredibly attractive external appearance and you’ve got additional features inside. With N-Line, you get a stronger residual value and a very compelling proposition in terms of packaging and affordability.
“We know UK buyers love that kind of sporty reputation, if you look at the mix of some of those trim lines with European manufacturers, they’re over 30%.
“Tucson for us is incredibly successful, we see growth year on year and this year it’s up again – 6.2% over last year and we haven’t even had the N-Line trim yet. So, N-Line will be another catalyst for a step change in Tucson success.”