Ashley Andrew joined Hyundai in January 2019, charged with moving the brand upmarket after a sustained period of mainstream growth.Here he discusses the significant progress made in that mission, why product has been key to success, the role electrification is playing and why he sees no reason to push to an agency model when retail partners are delivering such strong results.What lured you into automotive?“I consider myself very lucky. Because of my parents’ interest I’ve always loved cars. So when the university milk round was under way and Ford came in and did a presentation I was hooked – who wouldn’t be when showed all that rallying footage? I was lucky enough to get on the graduate scheme in sales and marketing, where they circulated you and moved you through the business. It was just a great experience. “It was an incredible era: there was nothing it wasn’t doing in terms of testing and innovating, the UK was a major market and it had big budgets. At its heart was opportunity: to work with great networks, great people and learn a lot about the industry. Whatever you put in you got out of it.”You’ve subsequently worked in leadership roles at BMW, Fiat, Mini, Rolls-Royce and Seat. What attracted you to Hyundai?“There was this stratospheric rise in sales post-credit crunch in around 2008. They were at the top of every ‘winners’ and losers’ chart’ and suddenly on all our competitive basket data. The speed of innovation and technology adoptionjust changed everything for them. “Today, all that research and development, all that foresighted investment is coming together in the product. The investment Hyundai has made is crystallising in the product at exactly the right time, and that’s just so exciting.”How has Hyundai achieved that when others haven’t?“It’s an interesting question, and I think the key point is that the core business is about innovation. That spirit runs through the company, from powertrain investments, to platform technology and on to fuel cell innovation, robotics, urban air mobility solutions and more. Its interest in mobility is backed by its investment in people and money into developing new ideas – and that, in turn, puts innovation at its core.”But still with relentless pressure to sell more and more cars?“Yes, but in an evolving way. In the past three years we’ve taken the edge off the chase for volume – we’ve got a great scale in the UK in the past 10 years – and put the quest into ensuring the brilliant products we have are sold at the right margins. “That R&D costs a huge amount of money, and there’s no point chasing volume when you have a limited supply of such advanced products. On top of that we’ve layered in a really distinctive design language that runs across the brand – and of course as well as making the individual cars more attractive that has also raised awareness of the brand.“The result is we’re in a far more premium position than we were three years ago, and so we’ve been able to shift the emphasis from volume of business to quality of business. That’s not an easy journey – it encompasses a lot, from protecting residual values, strengthening the retail channel, building true fleet through company car user choosersand more. But, today, 95% of our activity is through the network. We’d consider our position to be one of premium volume today, not just volume – and the financial results reflect that.”That’s quite a transition, given all that’s been going on these past few years?“Well, it’s true we didn’t anticipate all that’s gone on! But the main thing is volume isn’t the end in itself any more. And while all the supply challenges remain an ongoing issue, we can look at the order take to get an idea of the true demand for our vehicles. We’re seeing around 2500 orders a week, which is incredible – and our task is to manage that.“If we look at the overall market last year it grew about 1% but we grew 47%. The retail market grew 7% and we grew 37%. The alternative-fuel market grew 59% and we grew 104%, the true fleet market grew 10% and we grew 104% again. And we had a real success of actually selling our electric vehicles and alternative-fuel vehicles, which shows that our proposition is future-proofed too.”The breadth of Hyundai’s products is staggering, from EV to N performance cars, with pretty much everything in between. How do you keep a focus?“You’re right. We haven’t got the marketing budget to communicate every single vehicle, but the answer to that is focus on strengthening the brand, which brings everything up a level. That all feeds into our move into a more premium positioning, and as I’ve said we’re proud of our progress there.” What’s the retail network’s role in going forward? A lot of manufacturers are looking at agency models“We’ve asked a lot of our retail partners in recent years. That move from volume to premium volume has put pressure on them, and then working through the pandemic has been difficult for everyone. We’ve seen incredible entrepreneurship and innovation in the network in response to those pressures.“What we really want now is a period where the network can enjoy the success and the profit that comes from having made that transition to premium volume. So we don’t have any plans for agency, because it’s working so well at the moment. We want the investors to enjoy the return that they deserve from having gone through the restructuring that they’ve gone through.”So you don’t see agency as integral to delivering a premium experience?“I don’t see that, no. I see good customer service, strong residual values, a great relationship between the OEM and network as integral – and you can achieve all of those things with the model we have today.“The dealers are the experts at customer service – that’s never been clearer than today. They brought us through the pandemic with their flexibility and entrepreneurship. We need to respect that, and I don’t see today’s model being a barrier to growing margins or delivering great customer experiences.” Where do online sales fit in?“We’ve always innovated, but the approach remains the same, which is to explore every avenue we think has potential. Omnichannel is the buzzword – with good reason. Online, shopping mall sales, subscription – they’re all interesting, and they all add choice and flexibility for the customer. We’ll keep innovating, of course. Even tweaking what we have provides some interesting results, and making our store in Bluewater 100% electric in terms of what models it offers is another, recent example of that.”How committed are you to subscription services through the Mocean brand?“We see a lot of opportunity in terms of providing a service to customers whose lifestyle and behaviour has changed. “Post-pandemic there’s a lot of talk about flexibility – from how many days you have to work in an office to work-life balance. That could prompt some people to think they don’t want a car all the time, so the key to Mocean is that it provides flexibility.“We see that as an important area of the business that will develop particularly, as we bring in new innovation, as a great way for people to experience an electric vehicle before they take the full commitment to buy one. So you can take a short subscription on an electric vehicle and live with it and see what that’s like and whether it fits into your lifestyle.”Presumably you are eager for people to try your electric vehicles, because they have provided another giant leap in terms of your wider reputation?“Any big market shift presents opportunities. Perhaps one barometer of that is that our website traffic is 25% up on where it was pre-pandemic. That’s partly changing behaviour, particularly continually improving product – led most recently by the new Tucson and of course the Ioniq 5, both of which are flagship models for us now.“And, yes, electric is a huge opportunity. Today about 18% of our sales are electric, and Ioniq 5 feels like such a dramatic shift for the brand. It is a statement car that feels like it has the sort of impact that shapes a brand for years to come, perhaps as in the past the Porsche 911 or VW Golf have. But now our job is to follow through on it with everything else.”Do you think 2030 is still realistic?“Yes. The policymakers have set the regulation and the industry is geared up towards working towards that regulation.“Infrastructure is the key sticking point. We need a better density, better reliability and better consistency of infrastructure. It needs investment, and the regulation needs to be coordinated. Hopefully we are edging closer to a cohesive strategy.”Would you support the Plug-In Car Grant incentive being switched into funding for better charging infrastructure?“Well, clearly I’d prefer both. But if you really get into a debate around trading them off, then I think that would be a topic worthy of discussion between the SMMT and the Government.”How is supply looking, short-term?“It varies model by model and we are not immune to the issues, but we are now very good at managing the situation. The key there is to be as transparent as we can with customers – tell them what we know, what we don’t know and if either changes.“What the networks need – and in turn customers – is confidence in what they’re being told. And all we can do to help with that is be transparent.”Do you think waiting a long time for a new car will become the new normal?“There will be an element of that, I’m sure. Where networks would talk to customers a few months from the end of a PCP, they might now start that conversation six to ninth months ahead, to ensure a smooth transition.“But we have to remember that supply will normalise. These shouldn’t be long-term issues, and supply and demand should balance. The legacy will be more in the learnings we’ve taken and the sophistication we’ve built into our ownership cycles, and especially around anticipating and acting on them.”When do you expect to see an improvement in waiting times?“I wish my crystal ball was this good! I hope that from the second half of this year the situation will ease, and that easing should accelerate. But that relies on all other things being equal, which recent history suggests isn’t always the case.” How soon do you need greater certainty on what constitutes a hybrid that can be sold in 2035?“As much certainty as we can get as early as possible is essential. The UK competes with other regions to get supply, so the earlier we know what can and can’t be sold the earlier we can secure the cars our customers want.”The social side of motorsportCompeting in the World Rally Championship has been key to the growth of Hyundai’s N performance brand, but promoting that success has become a far more nuanced piece of marketing than ‘win on Sunday, sell on Monday’, believes Andrew.“What we’ve found is that social media is critical to spreading the word of motorsport success,” he says. “While it’s not as simple as selling cars off victories these days, it is in other regards simpler to get your message out there through social. People who are excited by motorsport are very engaged, and often have big followings – starting, of course, with the people who drive the cars. If you can harness those audiences then motorsport becomes a very powerful marketing tool.“It’s fascinating how it’s developed, but there’s no question that Hyundai has done a fantastic job of converting motorsport success into awareness of N, and in turn awareness of the incredible road cars that have been developed, too.”[/logged_in]