GENEVA – As part of a strategy to nearly double European sales before the end of the decade, Hyundai and Kia want to significantly increase their share of fleet sales.
Within three years, when European-designed and European-built products are rolling off assembly lines at its new plant in Zilina, Slovakia, Kia said it wants to devote at least 20 percent of its volume to fleet sales. Hyundai envisions nearly doubling its mix of vehicles in the fleet segment within two years.
The fleet market is important to Hyundai and its subsidiary Kia because fleet sales boost overall volume while increasing brand exposure with influential executives, especially in the company-car segment.
Kia currently has no fleet sales in Europe, said Jean-Charles Lievens, senior vice president of Kia Motors Europe.
Its market share we know we can gradually capture, Lievens said during an interview at the Geneva auto show. We have a real potential to grow that side of the business and we think we can make up some ground in those segments.
Last year, Hyundai sold 29,000 units to private companies in the fleet market – or about 8 percent of the carmakers total sales.
SUVs as company cars
Paulo Bossi, Hyundai Motor Europes fleet manager, said the plan is to nearly double that figure within two years, partly through fleet sales of its next-generation Santa Fe medium SUV.
More and more customers are seeing SUVs as company cars, said Bossi. If we can be considered by those buyers now, we hope to retain those customers when their leases are done.
Hyundai executives have said the companys fleet penetration in Europe is too small, especially in major markets such as the UK, Spain and Italy.
It is a major part of our strategy, said Gerry Dorizas, vice president of Hyundai Motor Europe. To eventually develop in Europe, we see fleet as a big slice of the market.
The fleet market – rental cars, company vehicles and employee cars – accounts for roughly 37 percent of the total European market. In 2005, the fleet market was about 5.6 million units.
It is the last big slice of the market where the Koreans arent involved, said Nigel Griffiths, an analyst with Global Insight in London. Its low-margin business, but they arent interested in profit as much as volume right now. They have a longer vision.
Last year, Hyundai-Kia sales in western Europe increased to 530,698 units from 351,906 in 2003 – an increase of 50.1 percent in two years, according to ACEA, the European car manufacturers association.
Lievens said Kia wants to sell more than 500,000 units by 2009 in 29 European markets, which would more than double its 2005 total of 242,063.
Hyundai also wants to double its European sales by the end of decade. The carmaker sold 317,750 cars last year.