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Hyundai Overtakes Toyota at the Finish Line
// By selling the third-biggest number of foreign cars in Russia
Foreign car sales soared 61 percent in Russia in 2007 to reach 1.65 million units. Korea’s Hyundai reclaimed its place in the top 3 in December bouncing back from a slump at the start of the year. French Citroen was the only one among the top 30 to see its sales declining. Citroen is also the only one of them that does not control all of its sales in Russia.
The European Business Association (EBA) on Monday posted data on foreign car sales in 2007 saying that a total of 1.65 million cars was sold, 61 percent more than in 2006. Ernst & Young estimates the sales to be worth $36 billion. Chevrolet with 190,500 units and 71 percent growth became the market leader followed by Ford with 175,800 units (52 percent up) and Hyundai with 147,800 cars (47 percent).
One month of operation sent Hyundai to the top 3 after it lost the third place at the start of the last year. Toyota was holding number 3 tight throughout late November, according to the EBA. In late November Toyota was ahead of Hyundai with an extra 2,400 cars. The situation is different now. The Japanese closed the year having sold 2,400 cars fewer than Hyundai.
The Hyundai Accent also became Russia’s fourth most popular model this year with 53,600 cars sold. It was ranked ninth at the end of August and sixth in September. It has been holding number four since October. Over the two months Accent was going up to leave behind Mitsubishi Lancer, Daewoo Matiz, Chevy-Niva, Toyota Corolla and Daewoo Nexia. The budget Chevrolet Lanos was the only one to show a more impressive jump as it went up from number seven to number three in January. Accent was at number four after the unbeatable Ford Focus (97,000 units), Renault Logan (67,800) and Chevrolet Lanos (57,900).
After the disastrous end of 2006 and start of 2007 when Hyundai plummeted to number five the brand has gradually recovered. Hyundai’s Russian office said that the company had a goal for 2007 to win back the market position and added that “they are happy with the results”.
Ernst & Young’s chief of the cars department Ivan Bonchev accounts the growth of Hyundai in Russia for a rise in the supply of car units to the Taganrogsky car plant (TagAZ) owned by the state-owned Doninvest. TagAZ’s spokesman Ivan Karpuzov confirmed that starting from September 2007 when sales of Accents went up Hyundai increased the supply to the factory dramatically. “The plant used to assemble 6 to 7,000 units a month, and it was 10,000 by fall,” he said. Mr. Bonchev believes that Hyundai was a bit late with the decision to boost the supply to TagAZ which he accounts for “the company’s internal problems”. Indeed, Hyundai was then going through corruption scandals and seeing numerous strikes.
Sales were also boosted thanks to the change of Hyundai’s distributor in Russia, according to Alexander Agibalov, AG Capital’s managing director. Hyundai past July handed over import operations to Hyundai Motor CIS, a joint venture of Hyundai and its former general distributor, Rolf. Hyundai is keeping a controlling stake in the firm but the company is still headed by Roman Khapaev, Rolf’s top manager. He was unavailable for comment on Monday. Alexander Agibalov notes, however, that the new distributor is “a minor factor while the chief reason for the success is the assembly growth at TagAZ”. “The example of Accent has shown what potential Hyundai’s new models have in Russia,” Mr. Agibalov said. “If the company’s new plant in Russia [with the capacity of 100,000 cars] will be assembling a budget model, we will see the return of Hyundai to the leadership on the Russian market.” The Korean car concern was the market leader in Russia through 2004 to the first half of 2006.
Citroen was the only top 30 company to see a downturn in 2007. 6 percent down was enough for the French firm to fall from number 27 to 17 in the EBA’s rankings for 2007. Ivan Bonchev believes that it could be because Citroen was not in control of car imports up till the end of 2007 but it was up to several firms, Satori, Citroen Center Moscow, Atlant-M, Citroen Otradnoye and Citroen Axis. Citroen’s Russian office confirmed on Monday that they had been “the only office of a foreign car maker without centralized sales” and added that they also experience “an advertising budget deficit”. Citroen is set to manage imports on its own this year.
Dmitry Belikov
All the Article in Russian as of Jan. 15, 2008
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