Hyundai Aus chief predicts market ‘headwinds’

HYUNDAI Motor Company Australia (HMCA) chief operating officer Scott Grant says the overall new-vehicle market will continue to slow down in 2019, with the Korean brand expected to follow the market’s sales dip.

 

With just one month of trading remaining for 2018, Australia’s overall new-vehicle sales are down by 1.9 per cent compared with the same period in 2017.

 

Sales are on track to finish the year in negative territory for the first time since 2014, but the market is still expected to exceed 1.1 million units for the seventh year running.

 

Mr Grant said factors such as the election – which must be held by mid-May – could mean that sales in the first half of 2019 are shakier than in the second half of the year.

 

“The total market will be down, we think another three to four per cent overall,” he said at a media event in Sydney this week. “But it might be a bit volatile – the first quarter might be one thing and the second quarter something different. 

 

“I think the second half it will start to stabilise a little bit as elections and a few other economic elements become a bit more certain. And by then maybe the royal commission might have started to figure out what kind of impact they are going to make and then (it will be) a more stable environment in the second half.”

 

Mr Grant acknowledged that the federal election would have a negative impact on sales.

 

“There is a lot of uncertainty and dismay around the general populous than there has ever been. There is always hesitation and nervousness leading up to (an election) and we can see that in the sales. It will definitely be the case. It may even be deeper and longer. There is a lot more uncertainty maybe about what is going to happen.”

 

Changes to regulations relating to vehicle financing were “definitely having an impact”, according to Mr Grant, as were other economic factors. 

 

“There are a range of what you might call headwinds coming at the industry in no particular order. Think about changes to F&I – the ACCC (Australian Competition and Consumer Commission) has been agitating in that space through their market study on the industry generally, so people within the industry are changing policies in that respect. 

 

“The credit tightening situation, change to foreign investors being out of the real estate market that has affected real estate values in Sydney and is flowing to Melbourne. 

 

“There is an element of underemployment and there is very little if any wages growth. There are headwinds. But none of that is a disaster. I don’t see any major tipping point (the industry is) going to collapse.”

 

In terms of Hyundai sales in 2019, Mr Grant said the company would follow the downward trend of the overall industry, but added that it was trying to strike a better balance with supply and demand.

 

“We will follow the market I think. I will hopefully get it confirmed this week. 

 

“We are balancing supply and demand a bit better than we were in the past. I think we had been quite aggressive in the past, moving cars into the market, backing our ability and our dealers’ ability to be able to retail motorcars. 

 

“But now there is a balance – too much is not good for anybody, too little is too tight. We are a quality manufacturer. You have to have a bit of wiggle room.”

 

To the end of November, Hyundai sales are down by 2.7 per cent compared with 2017, but it is expected to end the year in third spot again, behind Toyota and Mazda and ahead of Mitsubishi.