Hyundai's 2020: Staying Alive, Going Up

The difficult year 2020 saw many automakers record their worst sales in years. Hyundai is one of them.

How should Hyundai's 2020 be evaluated in a year when "living is the biggest victory" has become a **** knowledge?

On Jan. 11, Hyundai announced its full-year sales figures -- 502,000 units -- the lowest point in recent years. The day after the sales release, Hyundai's vice president Fan Jingtao said eight words: The year of momentum, stabilizing upward.

Focusing on these eight words, in the past year, from the intensive launch of new products in the second half of the year, which was finally ushered in after the ups and downs of the epidemic, to the comprehensive application of the i-GMP platform and the CVVD technology, to the integration of the channel system to improve the ability of a single store,......Beijing Hyundai is not only surviving, but is also planning for the future.

To this day, we are all somewhat dismayed by the development situation of Beijing Hyundai.

Once upon a time, Hyundai shocked the industry by creating a sales rate of 8 million units in ten years. Subsequently, the automobile industry even rose to the "modern speed" research, imitation of the craze. It can be said that Beijing Hyundai also witnessed the struggle of independent brands from close range.

Fan Jingtao recalls: when Hyundai entered China in 2003, the independent brand had not yet grown up, and the price of the old three kinds was high, so Hyundai's high cost performance was easily recognized by consumers.

Today, in Europe and the United States market, Hyundai is still able to match the existence of Toyota, but in the Chinese automobile market after ten years of ups and downs, joint venture pressure, independent attack, Beijing Hyundai has lost "speed".

Fan Jingtao said that to talk about cost-effective, has been "not a good thing."

In 2020, in addition to trying to "live", what Hyundai is doing, is to reverse the price-performance label. This is what Fan Jingtao called "build up momentum".

There is a saying that the thing that made you who you are has become the constraint today. It's easy to just say "change". But to throw away the label of envy and rebuild oneself is not only a mixed feeling, but also the taste of the road to change, which can only be sweet and bitter to drink.

If Hyundai is able to "move up" as it wishes in 2021, then the 2020 Hyundai will be the first one to be able to "move up" as it wishes. Then, in 2020, Hyundai can be called "successful".

Fan Jingtao, deputy general manager of Hyundai

1

Walking through 2020 amidst gains and losses

In 2020, under the impact of the epidemic, China's passenger car market ended up with a sales volume of 19.288 million, a new low in recent years. a new low.

However, looking back at the past year, in Fan Jingtao's view, the biggest impact of the epidemic on Hyundai was not the change in market conditions.

"Just like when it rains the rain will fall on everyone's head without any difference, the change of market environment has the same effect on all car companies. For Hyundai, the impact of the epidemic lies more in the disruption of Chinese and foreign exchanges."

The year 2020 is a big product year for Hyundai after a long time. According to the original plan, the 10th-generation Sonata will be launched in April, the seventh-generation Elantra in July, and the all-new Mito in September or October. And all of these products are to be produced on the new i-GMP platform.

"The new platform involves a lot of technical modifications for both Hyundai and the supplier system, and such modifications require on-site guidance from Korean experts. But none of this was possible during the epidemic."

Forced by the impact of the epidemic, Hyundai's product rhythm in the first half of the year was completely disrupted.

It wasn't until July that the 10th-generation Sonata could be launched, the seventh-generation Elantra went on sale three months later than expected, and the all-new nameplate had to be delayed until 2021.......

For Hyundai's full-year sales, such delays had a huge impact.

Before the arrival of the new generation, Hyundai hasn't had a new major model on the market for a long time.

As former Hyundai executive vice president Du Junbao put it, "The Link has been sold for six years, the nameplate for seven, and even the most elite team would be under pressure."

It wasn't until the second half of the year, with the arrival of new models, that Hyundai began to see a sustained upward swing in sales. Especially after the launch of the seventh-generation Elantra, in the last two months, Hyundai began to hit back-to-back monthly sales highs for the year.

2

Betting on the Elantra

In the second half of 2020, from the 10th-generation Sonata to the seventh-generation Elantra to the all-new ix35, in six months' time, Beijing Hyundai intensively launched three models.

Such a large-scale launch of new products for Hyundai will inevitably require them to make the most reasonable allocation of their limited marketing resources.

So, how to allocate?

In Fan Jingtao's words, it is necessary to choose "to do twice the work with half the effort". The seventh-generation Elantra is the model that can achieve twice the result with half the effort.

"The Elantra's pricing is around 120,000 yuan, which is the warmest market for Hyundai, and also the market with the largest capacity, and the time of its launch has caught up with the peak selling period of this market segment."

So, starting in September, Hyundai focused its marketing efforts on the seventh-generation Elantra.

"We hope to change user perceptions and bring confidence to dealers with the seventh-generation Elantra. After the Elantra is stabilized, then we will continue to make adjustments to the product structure," Fan Jingtao explained.

In his view, the seventh-generation Elantra is a model with "almost no shortcomings".

In terms of product strength, born on the new i-GMP platform, with the latest CVVD technology in the engine, equipped with Hyundai's latest "Intelligent Mind" driver assistance system, as well as the third-generation Intelligent Internet Connection in cooperation with Baidu, the seventh-generation Elantra can be said to be the best representative of Hyundai's technological labeling.

And in terms of sales policy, Beijing Hyundai has paired the "9-word motto" of "low threshold (low down payment, two years of full interest-free), high value-retention (two years of 75% discount repurchase), and full free (first year of commercial insurance is free, and lifelong maintenance is free)," to dispel the The consumer's worries.

The sales data after the launch of Elantra proved the correctness of Hyundai's choice.

In terms of sales, in November, the first full sales month after the launch of the seventh-generation Elantra, terminal retail sales reached 11,861 units. in December, its sales reached 19,433 units. According to this momentum, Fan Jingtao said, if no accident, the sales in January this year will exceed 20,000, which in turn will lead the whole Hyundai's monthly sales to 65,000 units.

Once upon a time, in Hyundai's sales history, the highest-selling model in the first month of its launch, the Rondo (the fifth-generation Elantra), had sales of only 8,700 units.

"The initial performance of the seventh-generation Elantra on the market is one of the best-performing products in Hyundai's 18-year history, starting from 2003 to 2020."

As a "model with few shortcomings," good sales don't seem to be enough to show the full picture of the seventh-generation Elantra's excellence.

According to Fan Jingtao added, the previous Pilot (the sixth-generation Elantra) had an average price of 93,000 yuan in the market, while in the seventh-generation Elantra, this price is 123,800 yuan, a significant increase of 30,000 yuan.

3

Several Flags for 2021

According to Hyundai's development plan today, in 2021, Hyundai will gradually come out of the doldrums. In Fan Jingtao's words, this year will be "the year of attack, the overall good".

The so-called "attack" refers to the brand empowered by technology, and the brand image continues to rise. The "all-around good" refers to the sales figures, operating profit and loss, factory start rate, dealers' profitability and channel health and other indicators all-around good.

In these indicators, in Fan Jingtao's view, dealer profitability and channel health is one of the most important. In order to realize this indicator to the good, from the beginning of 2018, Beijing Hyundai has begun to the number of channels "knife".

At the peak of Hyundai's sales, and in line with the market at the time, Hyundai had more than 900 dealers across the country. But after the sales decline, this former network setup has long been unsuitable for the current development.

So, starting in 2018, Hyundai began dealer network downsizing and consolidation. By the end of 2020, Hyundai's dealerships had shrunk to 680.

And according to Fan Jingtao's plan, by the end of 2021, this figure will be reduced to 600, with an average single-store sales capacity of 1,000 units. "When it reaches 1,000 units, the dealership will basically be profitable."

Corresponding to the size of the dealerships, in 2021, Hyundai has set itself a sales target of 590,000 units for retail and 560,000 units for wholesale.

The retail volume is higher than the wholesale volume, to which Fan Jingtao said the current Hyundai is no longer overly obsessed with speed and sales volume, and that it is more important to help dealers reduce inventory and improve profitability.

Meanwhile, in 2021, on top of doing a good job with traditional channels, Hyundai is also planning to explore more diversified forms.

According to Fan Jingtao, in response to the problem of high land costs in megacities such as North, Shanghai, Guangzhou and Shenzhen, starting from 2021, Hyundai will add more city showrooms in the mode of factory investment and dealer operation to solve the problems of display and sales. In the future, it will also address the issue of quick repair and delivery in the form of community stores.

And for the upcoming models of the new electric platform, they will also learn from the new car-making forces, the models are all directly ordered through the APP, the dealers do not have to bear the inventory, but only as a channel at the time of delivery.

In fact, in addition to the first new car based on the electrification of the exclusive platform E-GMP platform, 2021, is still a big year for Hyundai's products. The all-new Mito, the fifth-generation Tucson L, and the first MPV will all be brought to market.

And in these new cars, Mito and Tucson are on the amount of models, plus the Elantra this "family flower girl", next year, Beijing Hyundai's sales of 590,000 units of Flag can be realized, more worthy of expectation.