South Korea's Hyundai Motor is confident it will meet its aggressive sales target in Europe as affordable models with low emissions help it beat a grim economic environment and car market prospects, an executive said on Wednesday. Hyundai, which is an outperformer along with affiliate Kia Motors in the weak European market, said in January that it would boost sales in the region by 15.4 percent to 465,000 vehicles this year, after an 11 percent rise last year.
"I won't commit to crazy targets unless I think we can deliver them," Allan Rushforth, chief operating officer and senior vice president of Hyundai Motor Europe, told Reuters at the Geneva Auto Show. Hyundai Europe is aiming for a 3.5 percent market share this year, up from 2.9 percent last year. New Europe-targeted models such as the i30 compact car and the i40 mid-sized car and their derivatives will drive its sales this year. Rushforth also said Hyundai Europe aims to reach a 5 percent market share "in the middle of this decade."
Europe is seen a stagnant market for many carmakers, but Hyundai sees growth potential, with market share below 3 percent last year as opposed to 5.1 percent in the United States, 6.1 percent in China, 19.1 percent in India and 46.4 in South Korea. He said the company has been offering mass-market, low-emissions vehicles by "democratizing" engine technologies that were in the past used in expensive, premium vehicles. Its engines are relatively cheaper to install in its vehicles than some of the technologies its competitors are using, he added.
"In Europe, people are looking for just those characteristics," he said, referring to value, quality and low emissions. "Our whole brand positioning remains... we will always hang onto our value," Rushforth added. Hyundai is counting on the region to drive sales growth this year while its global sales growth is seen slowing. The cheaper won and South Korea's trade deal with the European Union also help Hyundai and Kia compete on price.
The bilateral agreement, which took effect in July last year, will phase out tariffs on vehicles shipped between Korea and European Union in the coming years, and has immediately cut tariffs on parts. Japanese rival Toyota, which has been overshadowed by the success of South Koreans in Europe in recent years, said good products backed by a currency which is "extremely competitive" make Hyundai and Kia outperform the market.
"It is probably the mirror of the yen," Alain Uyttenhoven, vice president at Toyota Europe, told reporters, referring to the strong yen that hurt Japanese carmakers. Hyundai rivals also complain that the Korea-EU trade deal gives South Korean companies an unfair advantage.
The deal "was a mistake. It's not balanced," Stephen Odell, head of Ford in Europe, said, adding that Koreans have sold seven times more vehicles in Europe than Europe has sold to Korea. South Korea exported 438,767 vehicles to the EU and imported 78,762 vehicles from the region in 2011, government data showed.