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africa|automotive|business|energy|products

New Hyundai boss expects negative 2023 as consumers battle tide of bad news

3rd November 2023

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Newly appointed Hyundai Automotive South Africa (HASA) CEO Gideon Jansen van Rensburg steps into his new role at a challenging time.

Not only is the domestic passenger-car market cooling, but the global market is also in upheaval as it struggles to make the transition to electric mobility.

Jansen van Rensburg says he believes HASA, a member of the listed Motus group, should see a 7% drop in passenger-car sales this year, which should be a slightly better performance than the overall domestic passenger-car market.

The reason for the decline will be the discontinuation of the Atos, as well as the fact that the new Grand i10 only entered the market in the second half of the year.

“The Atos, as the smallest and most affordable vehicle in our portfolio, made up a big portion of our sales,” says Jansen van Rensburg.

“Hyundai has not given us any indication that they will be replacing the Atos.”

The loss of the Atos is significant as 54% of all new-car credit applications in August were for vehicles under R200 000.

“We also hear that only between 12% and 15% of credit applications in the entry-level vehicle segment are being approved at the moment, which shows how much pressure the consumer is under,” notes Jansen van Rensburg.

While HASA’s competitors perhaps have a number of vehicles in the entry-level segment of the car market, Hyundai now only has the Grand i10 remaining.

Jansen van Rensburg says ten consecutive interest rate hikes, a significant currency devaluation, as well as rising energy and loadshedding mitigation costs, have all combined to see the average consumer with a R3-million house and a R400 000 car forking out about R10 000 more a month than two years ago.

“And salaries haven’t kept pace.”

Jansen van Rensburg replaces Niall Lynch, with the former HASA CEO moving to the parts business in the Motus mobility group.

Jansen van Rensburg was the HASA Gauteng and KwaZulu-Natal franchise director before his appointment as CEO.

He has been with the Hyundai import business in South Africa for 22 years.

Despite the loss of the Atos, Jansen van Rensburg is positive that Hyundai remains competitive as the focus continues to turn to more affordable motoring in South Africa.

“We are the only manufacturer that offers a seven-year, 200 000 km warranty across our entire range.

“That gives you a certain peace of mind. You can trade in your vehicle after four years and have the balance left of what most other manufacturers offer as the full warranty on their vehicles.

“And it isn’t a gimmicky warranty either – I have seen entire engine replacements at 190 000 km,” says Jansen van Rensburg.

“You can buy a cheaper vehicle upfront, but you may pay the price for it in the long run.”

Jansen van Rensburg says he would rather stick to being number four in the market than to try and fight back to number three – a position surrendered last year – through a rash of “cheap promotions”.

“We want to protect the value of our brand and our vehicles.

“We also face the challenge to keep our staff and dealership network in place and healthy.”

Looking ahead, Jansen van Rensburg says HASA will see the arrival of a refreshed i20 in the next 18 months, with “one or two other products also on their way out of Korea”.

At this stage, electric vehicles are too expensive for the local market, he adds, but HASA stands at the ready with suitable vehicles should the situation, including the energy availability situation, change.

The good news is that Jansen van Rensburg expects an improvement in the domestic economy in early 2025, when interest rates and loadshedding should have started to ease.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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