VM Interview with Hyundai Germany CEO Jürgen Keller: Independence is incredibly important!

Chip and COVID-19 crises, the switch to alternative drives, and new sales models: The passenger car industry has had easier times in terms of sales – and some brands therefore suffered massive losses in absolute numbers and market share in 2021. Hyundai was able to increase both. We spoke about the background in Munich with Hyundai Germany CEO Jürgen Keller.

VISION mobility: Despite the pandemic and chip crisis, Hyundai achieved record sales and market share in 2021, which jumped from 3.6 to 4.1 percent compared to 2020. It can't just be due to the young product portfolio, can it?

Jürgen Keller: Not only, the reasons for the solid result are surely also rooted in the corporate strategy and history: Firstly, there are also chip manufacturers in South Korea, and the corporation is certainly very well networked within Asia. It also places great emphasis on a certain degree of independence. Because Hyundai's own car production includes, among other things, its own steel and its own ships to transport the products. This is why the depth of manufacturing is comparatively high, which definitely brings advantages in times like these.

VM: Even in terms of delivery times: They still seem to be somewhat within the frame at Hyundai?

Keller: Basically, we are able to deliver, although I wouldn't call the situation optimal. I can give you two examples: If you are looking for a popular, but not a special model like an i20, you will find some vehicles at our dealers that you could take with you immediately. For popular models like the Ioniq 5, we currently have a four-month delivery time for the base version.

VM: That means for better-equipped models?

Keller: For "full house," which most customers order, it can currently take up to ten months. Here, significantly more components with semiconductors are installed, which are not fully available either, because there is now a shortage of not just chips, but all kinds of products that we wouldn't have thought about in 2021. But you can see it already: Just with the Ioniq 5, delivery times can vary by up to six months.

VM: Less of a problem for private customers than for fleets...

Keller: Although we are currently pushing the fleet business and making good progress there, the Ioniq 5 is predominantly bought by private customers. Many customers in the private customer segment are willing to invest in electromobility.

VM: What is the current share of commercial customers at Hyundai?

Keller: From 2020 to 2021, Hyundai's market share in the relevant fleet market grew from 1.4 to 2.4 percent, with an upward trend, and 62 percent of the vehicles had alternative drives.

VM: How do you assess the possibility of car subscriptions, which Hyundai is also introducing now, in this context?

Keller: Leasing and financing will continue to remain the first choice, especially since the rates are lower here. Nevertheless, more than 225 Hyundai dealers are now active in the subscription business, which we operate together with Vive La Car. What's interesting is that 95 percent of subscribers are first-time customers at Hyundai, and of those, according to our surveys, 95 percent were satisfied or very satisfied with our offer. Interestingly, flexibility is much more important to customers here than the rate.

VM: …which is not exactly cheap…

Keller: In direct comparison to leasing, that's true. But especially for small fleets or people who only need vehicles temporarily, the "all-in" - meaning including all costs except for operating materials - is an interesting option. From our observation, this also appeals to a younger audience that generally values flexibility much more and also "subscribes" to smartphones or TV programs.

What does this mean?

Hyundai currently has several arrows in its quiver - in terms of product and sales - and is comparatively well-supplied. All of this contributed to a strong 2021 and an optimistic outlook for 2022.