Automotive News Canada - September 2019 - v2 - 14

* S E P T E M B E R 2 019

The Hyundai Kona
and Palisade
crossovers are
fueling growth for
what had been
an automaker
dependent on cars.
PHOTOS: HYUNDAI

FROM 'VALUE
TO PREMIUM'
In slowing new-vehicle
market, Hyundai, Kia
are changing minds
and boosting sales
By JOHN IRWIN
TORONTO BUREAU

HYUNDAI AND KIA ARE BUCKING
the downward sales trend in Canada,
thanks to an expanding utility-vehicle
portfolio and different approaches to
retailing that have sometimes ruffled
dealer feathers.
For the
South Korean
brands -
newer to the
Canadian market than many
U.S.-, Japanand Europebased competitors - it's a
sign that conHyundai Canada
sumer percepCEO Don Romano
tions of their
says some dealers
vehicles are
bucked the
changing. The
automaker's new
notion that
image program.
buying a Kia
"But then, business or Hyundai
started to improve." vehicle means
FILE PHOTO
settling on
quality is becoming less prominent
among Canadian buyers, if growing
sales and high marks for quality in
consumer studies are any indication.
"I think it comes with the territory that when you're a relatively new
brand relative to the domestics and
even the Japanese, you get started
with a value proposition and then you
try to move to a premium proposition
over time," Hyundai Canada CEO Don
Romano said.
"To me, it's natural. The shrinking
[perception] gap will continue because
it's a function of us being a newer
brand than our competition.

"There are still people out there
that don't pronounce Hyundai the
proper way, so there's still work to be
done to get the numbers up. But it's
happening and heading in the right
direction."

thing kind of works the way it's supposed to. There's not a lot of fumbling
around and trying to figure out how
IMAGINE THE FUTURE
this works."
Romano also attributed
Hyundai and Kia, as well as the
some of Hyundai's growth to
Genesis luxury brand, have been on
the automaker's dealer-imthe receiving end of good news in a
age program, launched globyear marked by slow sales for most
ally in 2014. It will draw a
brands. Hyundai was up 3.8 per cent
compliance rate of 90 per
through August to 92,274 units, while
cent among Canadian dealKia rose 2.9 per cent to 53,906. That
ers by next year, he said,
flies in the face of overall sales that
THEY KEEP TECH SIMPLE
adding that it was critical
fell an estimated 4.2 per cent during
to improving the company's
"When they have decithe same period, according to the
dealerships and reassessing
sions to make around 'Do
Automotive News Data Center in
Kia Canada COO
Hyundai's processes as new
we do what the consumers
Detroit.
Elias El-Achhab,
vehicles came down the pipewant, or do we compromise assessing the
Hyundai and Kia also finished secline.
for other reasons?' they
ond and third, respectively, in J.D.
brand's current
"It included things like
almost never compromise," sales uptick: "If
Power's annual Initial Quality Study,
washing every car after serSargent said.
this is where we're
trailing only Genesis.
vice," Romano said. "That
"They tend to keep their at [now], I can only
"If this is where we're at [now], I
adds time and expense to
imagine what it will
technology simple. It's not
can only imagine what it will be in
the dealers in addition to the
be in the future."
that they don't have voice
the future," said Elias El-Achhab, Kia
FILE PHOTO
new facilities.
recognition or Bluetooth
Canada COO.
Dealers "weren't happy,"
or CarPlay, but they don't
For both the formerly car-heavy
he said. "But then, business
overengineer it. They give consumers
companies, a host of new utility vehistarted to improve.
95 per cent of everything they could
cles is helping drive growth. Hyundai
"We took our sales expectations
want in a very simple-to-use form.
has the new Kona and Palisade, while
down. Instead of pushing for mar"You get into a Hyundai and everyKia recently launched the Telluride.
ket share, we let natural demand
take place. That allowed us to reduce
inventory and inventory expenses for
our dealers. Then the next year [2017],
business got a little better for them.
And then last year we started hitting
our stride. Now, they're real happy."
Still, it's not all good news for the
brands. Neither Kia nor Hyundai is
immune to the shift in consumer preferences away from cars toward utility vehicles. And as Romano noted,
brands that depend on imports are
hurt by a low Canadian dollar.
"The worst thing anyone can do in
this industry is become overconfident.
We just have to constantly innovate,
constantly prepare, constantly push
More utility vehicles in the Kia lineup, such as the Telluride, have helped sales,
the dealers and have them push us on
and the company placed third in J.D. Power's annual Initial Quality Study
how we become better." - ANC
(behind Hyundai and Genesis). P H O T O : K I A
Dave Sargent, vice-president of
global automotive at J.D. Power, said
consumers are drawn to the brands
because features such as
their infotainment systems are easy to use. Other
brands, he said, get tripped
up in the Initial Quality
Study because of software
and other nonmanufacturing-related issues.

Automotive News Canada - September 2019 - v2

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