Hyundai regional director: ‘Saudi Arabia most significant market for us in region’

The new Tucson: Bold design lines.

In an exclusive interview with Arab News, Mike Song, head of Hyundai Africa and Middle East emphasized that Hyundai considers Saudi Arabia the most significant market in the region where Hyundai’s position overall is in second place.

He, however, confirmed that in the sedans and crossovers’ segment the company is number one in the Saudi market with a share of 36 percent.
He admitted that sales are difficult in the climate of low oil prices but added that “Saudi Vision 2030” outlines a strong and achievable pathway for economic diversification, so future growth will be less affected by oil prices.
He explained Hyundai’s success in the Saudi market by building trust over a long history and appealing to young consumers with quality and value. He also described Hyundai cars as fun to drive.
Song also disclosed that Hyundai would consider manufacturing operation in KSA if there were a compelling business case, adding “These investment decisions are made with great consideration and within a global context.”

These are highlights of the interview:
What is Hyundai’s position in the Saudi market and what is your share of that market?
We have around 24 percent market share and are the number-two brand in terms of sales — but that includes sales for our competitors in key segments such as large four-wheel drives and pick-ups, where we don’t have products. When you consider the market for passenger cars only, such as sedans and crossovers, we are number one, with a market share of 36 percent.

How did the company perform in the region during the first half of 2016 compared to last year’s first half?
The market has certainly been challenging, due to the general economic conditions, but within that we are performing strongly.
While every business prefers a growth market, Hyundai is a very strong brand in difficult times.
We are trusted by buyers to offer quality and value, and those factors are particularly important at the moment.

What are your most popular models in the Saudi market and what rank is that market in the region for Hyundai?
Our top-selling model in Saudi Arabia is the Accent, followed by the Elantra and then the Sonata, and the launch of all new versions of both the Tucson late last year and the Elantra this year have renewed interest in those lines.
As the biggest car market in the GCC, and with our market share, Saudi Arabia is clearly the most significant market for us in the region.
I think Saudi Arabia is the most important market for all car brands, and competition here is intense.

Has Hyundai ever considered establishing some local manufacturing operations in the Saudi market considering the incentives offered in “Saudi Vision 2030“?
If there was a compelling business case, I’m sure it is something we would consider — but there are no plans at the moment.
Hyundai has significant manufacturing operations worldwide, as well as research and design operations in Europe, but these investment decisions are made with great consideration and within a global context.

How do you explain the company’s success in the Saudi market?
We have a long history here, and have built a great deal of trust.
The foundations of our success are quality and value — our cars are well built and reliable, and we are very competitive not just in purchase costs, but also in costs of ownership. That has built our market over time.
For current buyers, a commitment to value is increasingly joined by the desirability of our products, with a great investment now being made in style and design, and levels of technology that are ahead of many of our rivals.

Has the company’s sales been affected by the drop in oil prices?
Sales are difficult across the industry. In the short term, this is frustrating, but we are very positive about the long term prospects.
The Saudi Vision 2030 outlines a strong and achievable pathway for economic diversification, so future growth will be less affected by oil prices.
At Hyundai, we are sustaining our sales performance while our market share is increasing, which is partly due to the safety people feel in buying a Hyundai.
So the immediate challenge is to achieve the highest sales possible, maintain profitability, and increase market share — and then hold that increased share when the market recovers.

With the success of your sales has Hyundai invested enough in the service, maintenance and spare parts infra-structure?
We are very proud of the support we offer after purchase, and our distributors are constantly expanding service facilities to meet the demand created by sales success.
In fact, it is partly because we offer service and value for maintenance and spare parts that we have achieved such strong sales — creating satisfied customers who return to the brand, and who also recommend us to others.



Does Hyundai intend to introduce hybrid or electric cars in the region?
Absolutely. We launched our new IONIQ range, which includes hybrid, plug-in, and fully electric options, this summer.
We are starting Middle East sales in Jordan, as well as international markets where there is established demand for alternative drivetrains.
We have previously offered hybrid versions of other models, such as the Sonata, internationally, but this is a first for us in the Middle East.
Saudi Arabia is definitely on the radar for hybrids and electrics, but we need to take a very measured approach, so plans will depend on further market analysis, as well as balancing sales and availability of vehicles worldwide.

Is Hyundai taking part in any regional or local campaigns for safety, the environment or charity work?
As a responsible company, Hyundai places great importance of supporting the communities where we operate, and work with distributors to identify CSR activities that are particularly relevant to their markets.
In the Middle East, that issue is road safety, and our partners in Saudi Arabia are supporting or initiating a number of projects to reduce injuries and fatalities on the Kingdom’s roads.

How do you describe the typical Hyundai buyer in the region?
Our buyers are certainly conscious of value, and there is a degree to which Hyundai will be a safe and sensible choice.
However, this has changed significantly in recent years — our buyers still demand value, but they also want a car that is stylish, comfortable, and enjoyable to drive — and we work hard to deliver on that promise.
One very notable point is that we are an increasingly youthful brand, and possibly the Veloster has played a big role in that.
There is no other car on the market that delivers such a sense of fun, and it has definitely changed the way younger buyers in particularly look at Hyundai.