Cheaper Hyundai i30 set to reverse falling sales

HYUNDAI is set to release a lower-priced i30 range-opener to sit below the existing Active over the next few months, as the company acts to arrest falling sales of the all-new third-generation model launched in May.

In an admission that the strategy of offering a better-equipped and higher-priced model was not resonating as strongly with consumers as hoped, Hyundai Motor Company Australia (HMCA) chief executive officer, JW Lee, said that a cheaper base version of the new-generation PD-series i30 might be the only way to lift sales back up to previous model’s levels.

However, a return to the sub-$20,000 “driveaway with free auto” days is still off the table.

Speaking frankly about the slower-than-expected initial sales figures, Mr Lee admitted that the latest i30’s more sober design compared to the previous version hides the fact that it is a much improved and better-specified proposition that justifies its higher pricing.

“Customers, our dealer network and even journalists appreciate the i30,” he said. “But the good reputation and all the good features are not reflected in the PD’s sales.

“My feeling from the dealer network is that it has a major thing to do with price. Customers perception is that Hyundai is a maker of affordable and well-made cars with good features and good performance. So, this is a challenge for us. Customers do appreciate these features, but I think it will take more time to persuade consumers what the real value of our cars is.

“We also have feedback from our dealer network about the differences in perspective about our design and style. The new PD is more inclined towards the European style of cars, so maybe some of our customers are yet to appreciate such European styling.

“We cannot do anything about the design, but in terms of pricing, we are going to consider a lower (specified) version to entertain those customers who are still looking for more affordable cars.”

To the end of September, i30 sales are down 28.9 per cent compared to the same period last year, from 29,678 to 21,103 registrations.

Although that still places Hyundai on the small car segment podium, it has conceded the number two position to the Mazda3. The Toyota Corolla continues to lead the segment.

While Hyundai would not confirm any details or reveal timing, GoAuto understands from one dealer that a $21,990 driveaway price for the entry-level automatic is where the series needs to be, rather than the $23,250 plus on-road costs that the volume-selling Active automatic currently lists at, for sales to really pick up again.

Whether this means that the proposed new base i30 would lose the existing Active’s class-leading standard features – including satellite navigation, DAB+ digital radio, rear parking sensors, auto headlights and 16-inch alloy wheels – remains to be seen.

However, Mr Lee revealed that to lift the brand’s reputation above the ‘bargain basement’ level it has operated on for much of the past 32 years in Australia, he has even considered lowering volume targets in order to maintain what he believes is pricing that reflects the i30’s improved quality.

“This is still a concern because we want to change our brand image with the new PD, but the reality is that this will still take some time,” he said.

“I have tried to deliberately keep down our sales volume next year to keep our brand values we’re trying to achieve with the i30, because the PD deserves its pricing and positioning.

“But customers have yet to appreciate that, so reducing our target volumes (might be the answer).”

At the i30’s launch last May, HMCA chief operating officer, Scott Grant, told GoAuto that the previous-generation Active – which at times was promoted at $19,990 driveaway with free auto – accounted for up to 90 per cent of i30 volume. At the time, he said that the latest Active’s share would fall to around 66 per cent due to an anticipated higher take-up of more expensive variants such as the lauded SR turbo.

While that has been the case to some degree, the 30 per cent drop has sounded alarm bells.

While a less well-equipped price leader is imminent, Mr Lee still maintains that the i30 will not fall below the $20,000 mark, even as this model ages and fresh marketing techniques are required to keep sales buoyant over its expected five-year lifespan.

“I never want the PD to go back to being an under $20,000 car,” he said. “I think it is a remarkable car and I don’t want to spoil it with volume-driven (marketing). But we have production concerns, and we need to keep up certain volumes to run our plants, so it is a Catch 22 situation.

“This is just the first year of the PD’s lifecycle, and we still have to sell this car for a further four or five years. And if we go back to our normal earlier practice, the PD would return to being a cheap car and that (sub-$20,000 pricing) only would happen over my dead body.”

The latest i30 will not be available in 2.0-litre petrol-powered Elite and Premium grades until at least the middle of next year.

There is no wagon version this time around due to low sales forecasts and high pricing as a result of the latter’s Czech Republic sourcing, and the Fastback version unveiled at last month’s Frankfurt motor show is also unlikely to head to Australia for the same reason, except in high-performance ‘N’ guise sometime early in 2019.