Koreans' scrappage success

Hyundai and Kia have made the most of scrappage schemes across Europe to date; SHANE O'DONOGHUEwonders if they are going to do the same in Ireland

THE UNDISPUTED winners in scrappage schemes in Germany and Britain were the Korean marques, Hyundai and Kia, with the former taking top spot in the UK, rapidly moving the brand to second place in UK retail car sales. In Germany, Kia recorded a 65.5 per cent increase in new car registrations, while it set a new record for the brand in Europe by selling more than 50,000 cars in the UK in 2009, raising its market share to 2.5 per cent for the first time.

Hyundai sold more cars through the British scrappage scheme alone in 2009 than it sold in an already good year in 2008 (33,297, plus 15,000 on back order, versus 29,000) and the diminutive i10 was the most popular car bought in the British scrappage scheme – accounting for one in every 12 orders.

Tony Whitehorn, Hyundai UKs managing director, said: “Thousands of people in the UK recognised that scrappage is a very special offer and have snapped it up. It has certainly been an amazing year for us, 2009 is our best year in the company’s history.

“Our import centre is working flat-out, 24 hours a day, to make sure the cars get out to dealers as soon as possible. Our dealers have taken on an average of 20 per cent more staff to cope with demand.”

According to Stephen Gleeson, newly appointed Managing Director of Hyundai Cars Ireland: “It’s not difficult to imagine the i10 having similar success in Ireland as in the UK, particularly when the i10 has been the best-selling five-door car in the A-segment in 2009.”

Given the low price of entry to both the Kia and Hyundai ranges, it’s no surprise that the best-selling models were the Picanto and i10 city cars, finding 16,803 and 17,622 customers respectively in the UK. In Germany, an incredible 70 per cent of Hyundai buyers through the scrappage scheme had never bought a Hyundai before.

The British scrappage scheme ends in February and sales have already tailed off, due in part to a return to the country’s higher VAT rate. Yet the Korean marques should benefit from an increased awareness, moving from an image of budget motoring into the mainstream.

Michael Cole, Managing Director of Kia Motors (UK) said: “2010 will clearly be more difficult because of the end of the scrappage scheme, but in response to that, Kia has announced that all its products sold in Europe will now be covered by the seven-year warranty previously only applied to ceed and Sportage.”

With the new Irish scrappage scheme only applying to cars in band A or band B in terms of CO2 emissions, the balance of sales will tip even further towards small and efficient models. Both Hyundai and Kia have scrappage scheme offers ensuring that the i10 and Picanto are amongst the cheapest new cars on sale, though most other manufacturers have their own tempting offers.

On the likely best-sellers, the i10 and i20, Hyundai will offer an additional €2,000 discount on a new car for buyers partaking in the scrappage scheme – bringing the total discount to €3,500. Although Kia is less generous, its comprehensive seven-year warranty will surely tempt buyers who might consider keeping their new car for another 10 years.

While the factories in Korea agreed to ship more right-hand drive cars to Britain to satisfy demand, it’s unlikely that Irelands smaller pool of customers will require such measures. However, Stephen Gleeson is confident it can repeat its success here: “Hyundai Ireland look set to continue this trend into 2010 with pre-bookings for January 2010 up by 70 per cent.”