Hyundai’s electric offensive in Europe has gotten off to a good start with the success of the full-electric version of the Kona SUV. The automaker plans to launch more electrified vehicles by the end of 2020 and has not suffered from the transition to new emissions standards under the Worldwide harmonized Light vehicle Test Procedure (WLTP). But the price war underway in Europe might force the automaker to revise its ambitious targets downward. Hyundai Europe Chief Operating Officer Thomas Schmid shared his views on this blurred picture with Automotive News Europe Correspondent Andrea Malan.
The EU's new CO2 emissions standards start to take effect in 2020. Will Hyundai be ready and avoid fines?
Every carmaker has been challenged by the massive drop in diesel share. Prior to that, most of us were quite confident we would comply. Our countermeasure is to launch even more electrified cars to compensate [for the loss in diesel share]. According to our current calculations, we are doing well. As far as 2025 and 2030 are concerned, nobody knows.
Has the diesel decline stopped?
Across Europe diesels still command a more than 40 percent share, thanks to Italy. But in countries such as France, there is a political movement to move away from diesels, mostly in big cities. We try to be prepared for everything. We have good gasoline and diesel engines. Next year we will launch another two electrified vehicles [both hybrids] as well as another [electrified model] that will be completely renewed. To sum it up, we are trying to be prepared to satisfy customer demand in every market. But it’s fair to say that is very challenging and very expensive. So far, Hyundai hasn’t suffered as much as the market because we launched our new diesels. But it’s hard to compete with the emotional side of the consumer.
How much will the diesel share fall?
As long as the discussions on diesel continue, we will face a further decline, starting in 2019. Long term, this kind of engine will almost disappear with the exception of a small percentage — maybe 10 percent to 15 percent.
Has Hyundai suffered any disruption in production or sales from the changeover to the new WLTP emission test rules, which went into effect in Europe Sept. 1?
Since the beginning of the summer, all our vehicles on sale in Europe have been compliant with the Euro 6d-temp rules after WLTP tests. Therefore, we had no reason to do preregistrations in August. We were really challenged in September, however, because the market was down 20 percent to 25 percent due to the hundreds of thousands of preregistered vehicles [from other automakers] that have to be sold. Nevertheless, we achieved our targets in September. For the first time in history, our market share in Europe climbed above 4 percent [Hyundai’s European share was 4.2 percent in September, according to ACEA data].
Will Hyundai make its 2018 targets?
Yes, but we won’t get caught up in the incentives push. Depending on the brand, some of our competitors’ incentives are now 50 percent higher than before. They went from 2,000 euros to 3,000 euros [in discounts] to 4,000 euros. If this gets even worse, we will have to adapt our targets, because we are not interested in unsustainable business.
How about 2019?
I assume that the continental European market will be very solid and grow slightly. Overall, however, Europe might drop and the main reason is Brexit. If there is a hard Brexit, the UK market will decline dramatically. Since it is the second-largest market in Europe, that means the overall market will be down.