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Insight

Experienced Player's Next Steps

Mon, 09/01/2014 - 17:13

One of the most-recognized Asian players in the market, Korean OEM Hyundai, was an early believer in Mexico’s automotive production power. Having decided to make Mexico its first overseas investment 25 years ago, its Tijuana plant has been manufacturing chassis and boxes for trucks since 1991. The US$250 million that the OEM has poured into the plant over the years stands testament to Hyundai’s commitment to the country, which is now complemented by an increasing focus on sales and distribution.

Hyundai is currently seeking to sell vehicles through different channels. Starting in 2000, it began selling its vehicles through Chrysler-Dodge dealerships. “Since 2000, Hyundai sold near 350,000 vehicles in Mexico, mostly small vehicles. This marked a good start and a very important endeavor for us. Throughout this time, Hyundai was able to learn a lot about the market and understand the habits and needs of Mexican customers,” explains Pedro Albarrán, Managing Director of Hyundai Motor Mexico. “Sharing a distribution network with Chrysler allowed Hyundai to prove the quality of its vehicles among more customers and create a positive image for the brand in Mexico.” The company is now working on increasing its visibility and opening up Hyundai’s own distribution channels. Hyundai has decided not to run its distribution network alone, and has picked representatives to establish 20 dealerships across the country. Albarrán says this decision came from the respect Hyundai has for the market. “Our job is to produce cars and then pass them down to distributors that know how to sell cars to the final customers. Those dealers have all our support,” states Albarrán. He is aware of the opportunities that the Mexican market still has to offer and states that the market should expand if the right conditions are given. “Judging by the reforms taking place, by the way Mexico is playing in the global market, and improved credit for automotive purchases, we believe this market will continue to grow. While it is difficult to estimate this growth rate, we want to be a part of it.”

The Hyundai Elantra, the Grand i10 and the SUV ix35 are the anchors of the company’s distribution in Mexico. For Albarrán, the models brought to Mexico are proof of how much Hyundai has advanced in terms of design. The advancements were made based on studies carried out by Hyundai to understand market needs, and these models were then adapted to Mexico, such as raising them slightly to account for the speed bumps and potholes that are found on Mexican roads. “We studied the market. The Mexican market is quite unique, Mexicans are looking for the comfort found in American cars but they also want European designs. Evidently, we tried to cover a lot of those characteristics,” explains Albarrán. Taking a step in the distribution of its own cars puts some pressure on Hyundai’s product offering. As such, the company understands the importance of service during the whole vehicle cycle. This experience starts with the design of the dealerships and stretches to the service that customers get from sales personnel. “We have great dealerships with strong customer areas to look after clients and provide them with an unforgettable service,” comments Albarrán. “Hyundai takes a proactive approach by reminding customers that already own a Hyundai car to bring them to approved dealerships for maintenance.” Albarrán also mentions that Hyundai established a warehouse in Mexico City to store the brand’s auto parts, making the city its logistical center in the country. “Dealers usually have basic parts for minor and common needs, but when something more specialized is needed, they can call us before 10am to get a same-day delivery.”

In 2014, Hyundai wants to sell 8,000 vehicles and double that number for 2015. “We are looking to grow by exceeding our customers’ expectations at this time. We are offering things that no one else is offering in a way that no one is doing,” says Albarrán.