The current Hyundai i20 is Australia’s top-selling light car this year, but there is a genuine chance that its recently revealed successor model will not make it here.
A change in global production appears to have placed the Korean brand’s local arm into a bit of a pickle.
Unlike the current i20, the new one cannot be sourced for here from India, but instead must come from Turkey — a much more expensive proposition on an extremely price-sensitive model, and also one with longer lead-times (ordering times) by way of its geographical distance.
Hyundai Australia is still working on some way to get the new-generation i20 here at a reasonable price point, given it considers selling at the sharp end of an already sharp segment vital to its success.
There is no done deal to secure that the hugely popular current model will be replaced, though the company had previously said it hoped for one by year’s end.
Pictured: New-generation Hyundai i20
The prospect of a company not having viable access to the replacement for a top-selling model is a rare one indeed, and not a welcome one for a company that is this year within a whisker of overtaking Mazda as Australia’s top full-line importer on a volume basis.
Hyundai does have some breathing space. The current i20 can be sourced out of India through until the end of 2015, and the company believes it will have enough stock to maintain its strong position against rivals such as the Mazda 2 and Toyota Yaris at least next year.
But the prospect of Hyundai being without a key model from 2016 is no doubt music to the ears particularly of Mazda, which is naturally keen to reclaim top spot in the segment with the 2.
Public relations general manager for the brand’s local arm, Bill Thomas, explained the situation to CarAdvice today, and also how the Accent and even potentially the smaller, sub-light European i10 (not yet sold here) could step into any breach.
“We’ll see the existing car through 2015 being Indian sourced, they will still build it for us,” Thomas said.
“It gives us time to work out the price equation on the new car, and it’s difficult because we have to source the car from Turkey.
“The [new-generation] car that will be built in India, isn’t the car we’re after. It has some different specifications on it that aren’t suitable for us, so we don’t have the option of taking it from there.
“It’s a lot more beneficial price-wise to take it from India, obviously, the economics make more sense, however the option is not available to us.”
Th way Hyundai sees it, while many rivals make light cars sourced from geographically distant locales work for Australia (Renault also makes the Clio in Turkey and the company’s Australian arm is currently selling the base model for $15,990 drive-away), the i20 doesn’t fit this mould.
“With a car like that we have to be super sharp…. in that space and that category you’ve got to make sure you have an entry car that hits a good, low price point. We don’t see much benefit in bringing that car in and selling it at a higher level or price,” Thomas said.
Pictured: Current Hyundai i20
“It’s what drives the difficulty of negotiations with that car.”
This point could potentially be amplified by the recent decline in demand in Australia for light cars, with sales at that end of the market down 6.4 per cent. The i20 leads this segment and bucks that trend with 12,613 sales YTD, up 8.2 per cent. The Mazda 2 (10,920) and Yaris (10,625) are down 17 and 13 per cent apiece.
In terms of what the company can do to make up for any potential shortfall, either from a pricier i20 or — worst case scenario — no i20 at all from 2016, Thomas said a few options were available.
“We may be able to do something with Accent, again that’s not confirmed but there might be something we can do on price and spec with that.
Pictured: Hyundai i10
“Maybe something on i10 [as well]. The i10 also made in Turkey, but it might be something that works better for us in terms of pricing and spec.”
If you combine Accent sales (6569, up 27 per cent) in 2014 with the i20, Hyundai is easily the dominant player in the light-car space, with market share of around 22 per cent.