The Korea Herald

피터빈트

Hyundai, Kia increase Europe market share

By Korea Herald

Published : June 20, 2012 - 19:48

    • Link copied

Hyundai Motor Co. and sister brand Kia, already boosting sales in Europe’s contracting auto market, are extending their challenge to Fiat SpA and PSA Peugeot Citroen by enlisting soccer stars to steal customers.

The Korean carmaker is attracting Europeans by stepping up sponsorship of their favorite pastime, hiring soccer heroes like Germany’s Lukas Podolski and France’s Karim Benzema to promote Hyundai as part of a marketing blitz focused around the European championship, the region’s biggest tournament. Kia Motors Corp. revamped the Cee’d compact, giving it sportier European styling to challenge Volkswagen AG’s Golf.

“One of the issues we face as a brand in Europe is that we’re considered Asian and people don’t feel emotionally attached,” Mark Hall, head of marketing for Hyundai in Europe, said in an interview. “Anything that connects with the region’s passions helps close that gap.”

Hyundai and Kia are intensifying their targeting of European consumers to extend their expansion, which has been based on a mix of low prices, long warranties and inexpensive manufacturing. That combination has made the Korean manufacturer the only volume carmaker to grow in the region this year, at the expense of local brands, according to data from auto industry lobby ACEA.

The Seoul-based group’s sales rose 16 percent through May, compared with a 17 percent drop by Italy’s Fiat. Deliveries for French manufacturers Peugeot and Renault slumped 15 percent and 19 percent, respectively. General Motors Co.’s European sales, including the unprofitable Opel brand, declined 11 percent, while Ford Motor Co. fell 8.2 percent. Sales at Volkswagen, the region’s biggest carmaker, slipped 1.9 percent.

“They’re benefiting from lower costs, and their cars have clearly improved in quality and technology,” said Tim Schuldt, a Frankfurt-based analyst at Equinet. “The French, Opel and Ford are challenged by them the most. Now Kia and Hyundai must manage their growth, which has been a problem for many companies that expand fast.”

Hyundai plans to increase European sales by about 25 percent to 500,000 cars by 2013, boosted by the ix35 crossover and i30 hatchback. To underpin its goal of lifting its European market share to 5 percent from a target of 3.5 percent this year, the brand will double capacity at a factory in Turkey to 200,000 vehicles, investing 475 million euros ($598 million) to add the i10 subcompact there by the end of next year.

Kia intends to lift its share of the European market to 3 percent next year from 2.5 percent now. The carmaker added a third shift and about 1,000 workers in the first quarter to its plant in Slovakia.

The expansion contrasts with GM’s plans to close an Opel factory in Germany after Fiat shut an Italian plant at the end of last year. Overcapacity in Europe is projected to more than double to about 2 million vehicles in 2012, with demand forecast to drop for the fifth consecutive year.

Kia is basing much of its growth on the revamped Cee’d, which is narrower, lower and 5 centimeters (2 inches) longer than its predecessor, to lure customers away from models like the Opel Astra, Renault Megane and Peugeot 308, according to Paul Philpott, Kia Europe’s chief operating officer. The model starts at 13,990 euros, 18 percent less than the VW Golf.

“It’s a car designed for Europe, built for Europe, by Europeans,” Philpott said in an interview. “It’s got a very European feel to it.” 

(Bloomberg)