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Improved economies of scale enable i10 to major on value for money

By / 10 years ago / Latest News / No Comments

On sale early next year priced from £8,345, the new car is being billed by Hyundai as an “A to B” car – A-segment pricing with the facilities of a model from the class above. Although the base model will no longer have air conditioning as standard, it does have more airbags. Quality has also substantially improved. Higher up the range there are price rises of up to £400, but there is increased standard equipment which, Hyundai says, would cost buyers 10-15% more if bought as individual items.

The reason for the increased value lies in improved productivity of the model. European versions of the new i10 will be built at Hyundai's plant in Turkey, whereas the previous model was made in India. The capacity of the Turkish plant has been increased from 120,000 units a year to 200,000 to make this possible.

India will build its own version of the newcomer, called the Grand i10, purely for the domestic market. The new platform will also be used for the next Kia Picanto in time.

This will give the Hyundai-Kia group the economies of scale that make zero or minimal price increases on the new i10 feasible, said Hyundai UK president and CEO Tony Whitehorn to news agency Headlineauto.

The UK is the leading market in Europe for the i10, with annual sales that have never dipped below 20,000.

‘We are in the top two or three in the A-segment. My aim with the new model is to sell about 20,000 next year and extend the appeal of the car,’ said Whitehorn.

Hyundai expects to have sold between 77,000 and 80,000 cars in the UK by the end of the year compared with 74,000 in 2012 – despite initial forecasts that 2013 would be a year of consolidation.

But the recession in parts of Europe has freed up production for the UK, Whitehorn said. ‘We are getting extra cars from Europe. What we are experiencing is being experienced by all other manufacturers.’

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Natalie Middleton

Natalie has worked as a fleet journalist for over 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.