Thomas Schmid, COO at Hyundai Motor Europe: "New Tucson will attract all new Hyundai customers"

The new Hyundai Tucson is a brand ambassador, designed to up the image and attract new customers to the ambitious Korean brand. 'Seeing that half the European market is fleet, it makes sense to want to be a part of that', says Thomas Schmid, Chief Operating Officer for Hyundai Motor Europe. With only 22% of its overall sales going to fleet, that leaves a lot of work to be done.

“We're a very young company, we only came to Europe in the early 1990s, so we have almost no history or heritage”, says Schmid. That hasn't stopped the company growing. Last year, Hyundai sold 8 million cars globally, and became the 5th-biggest manufacturer.

So now there is the new Tucson. Where does it fit into the overall picture?
“The Tucson is part of Hyundai's SUV heritage. We were one of the first brands to enter that segment, back in 2001, with the Santa Fe. The Tuscon is a brand ambassador. Its design will attract people to choose Hyundai for the first time”.

Why did you turn back again to the name 'Tucson'?
"First, there was the Hyundai Tucson. Launched in 2004, the first generation of the compact SUV was sold worldwide under that name. For the second generation, launched in 2009, the name was changed to Hyundai ix35. This was in line with Hyundai's naming convention. An ‘i’ as our regional code, and an ‘x’ for derivatives, like four-wheel drive, and crossovers. If it's a derivative from an existing model, there's a ‘5’ at the end. So the ix35 was a derivative of the i30.
To turn back to the original name is a strategic decision. Vehicles that are the same or similar globally should have the same name. This supports the global aspect of the Hyundai brand. Also: name awareness for Tucson was only slightly less than for ix35, so it will be easily reintroduced”.

How important will the Tucson be for your fleet sales?
“Fleet sales account for 22% of our total sales, which is below the industry average. But we are doing quite well in true fleet. And this is where the Tucson is important: in true fleets, especially those of SMEs. We don't release specific sales targets, but we're ambitious enough with this model to want to have annual sales of 100,000 units over the next few years”.
 
Will you roll out more dealerships?
“No. We have almost 400 dealers across Europe, which by the end of 2018 should all be fitted with our new design. Overall, our sales, both private and fleet, are in transition. Online activity is increasing, not just in the information-gathering phase, but also for ordering – and eventually, the whole purchasing process could move online. We have some experience with digital showrooms and we notice that online shoppers are younger and with a higher mix of female consumers - precisely the audience car manufacturers want to reach”.
 
So, will the number of physical dealerships decline?
“It's already happening, across all brands. This is because the quality of vehicles is improving, and fewer maintenance intervals are needed. In the 1990s, you needed 500 clients to provide work for one mechanic. Now it's 1,000 clients. And this evolution will continue. At the same time, you need to train your staff more. To fund that, you need more sales per salesperson. This is why growth means more sales per dealership rather than more dealerships”.

What is your reaction to the fact that Hyundai still has some catching up to do in Europe – both in brand image and CO2 emissions?
“Our brand image is behind our product reality. New products like Tucson will shift perceptions, but the brand lacks heritage. Had we been in the market for 60 years, we would be perceived differently. But it's changing. The Santa Fe is attracting premium-brand customers. And the Tucson is appreciated for its design, among other things.
In 2010, we launched our new powertrain family. Then, we were an average of 12 grams ahead of all other manufacturers. Now we are halfway through our renewal cycle, and our new engines are coming, which will bring new gains. And we will also invest in electric, hybrid and plug-in hybrid”. 

Google, Apple and other tech companies are developing products for, services in and synergies with the automotive sector. Do you see them as just more service providers, or as competitors to OEMs like you?
“It depends on how you see the future. I think cars of the future will be smartphones on wheels. Another option emphasises the assisted systems of future cars. Both aspects will be important. Connectivity is already hugely important to us. And Korean companies are in the forefront of the technology. That's why Hyundai is working with Samsung, LG and others, and is installing (Google's) Android Auto in its cars. It's all part of our mission to deliver high-quality technology at an affordable price”.
“Google is working hard to produce its own vehicles. But we still don't know where we will end up. Perhaps the customer, unwilling to share so much personal data, will decide against hyperconnectivity”.