Market Insight: Hyundai’s Elantra gamble

HYUNDAI Motor Company Australia (HMCA) has taken a bold step to improve its position in the all-important small passenger car segment by switching the Elantra nameplate to i30 with the new-generation sedan coming early in the third quarter.

 

The i30 is currently Hyundai’s top-selling model, and HMCA’s decision to bring Elantra into the fold – an altogether different, American-bred vehicle compared to the Euro-focused hatch – will naturally stimulate sales.

 

Combine the two, i30 and Elantra, and Hyundai hoovered up more sales (31,022) last year than the segment-leading Toyota Corolla (30,468) – a double act that, if achieved under the same nameplate, would have handed it bragging rights in the nation’s biggest passenger car segment as well as a podium position as one of the best-selling models in the entire market behind the Toyota HiLux and Ford Ranger utes.

 

Yet the move to pass off the Elantra as an i30 is not without risk, as we saw when Nissan wanted us to believe that Tiida was really a reborn Pulsar, and when Holden asked us to accept that the Cruze sedan was actually an Astra.

 

Both vehicles failed in the marketplace, and we suspect that among the reasons for their demise was the fact that buyers did not readily accept that they were deserving of the new nameplate.

 

There would be no questions raised if the Elantra was created from the outset as an i30 sedan, just as the Corolla and other popular models in this genre such as the Mazda3 are developed with comparable styling, dimensions, interior design and so on.

 

Asked why the Australian subsidiary of the South Korean brand has switched Elantra to i30, HMCA’s general manager of corporate communications and partnerships (and up until recently director of marketing) Bill Thomas told GoAuto: “It’s just to get it all consistent under the one model line.

 

“If you look at the competition, the key competitors are all selling hatch and sedans together under one name, so we asked our parent company for support with it,” he said.

 

“We’re one of the few markets that sell Elantra and i30 hatch together – it (Elantra) is not taken in Europe – so there isn’t that issue in Europe, and the Americans aren’t going to be selling the hatch either, so we’re sitting here as one of the only markets that takes Elantra to sell alongside the i30.

 

“The i30 is a real stalwart for us, it’s really central to our brand, so it makes a lot of sense for us to standardise it with the sedan.”

 

There is, however, the obvious issue that the two are separate vehicles and not simply different body variants from a single model line.

 

As to whether he expected the differences would create any issues for buyers, most notably in terms of styling, Mr Thomas said: “No, I don’t think so.

 

“It’s just nice for us to be able to have cars in the same segment with two different body styles under the same name.

 

“It just makes sense from a marketing and sales point of view. So we were quite happy to get the support of the parent company on that,” he said.

 

We appreciate that it makes perfect sense from HMCA’s point of view, but whether buyers respond positively remains to be seen.

 

Elantra is a well-established nameplate but the i30 is the go-to model for Hyundai in the segment, where the brand also offers the niche electrified Ioniq range.

 

So on the surface of things, Hyundai’s line-up should be easier for customers to understand, and positive feelings toward the i30 should rub off on the model formerly known as the Elantra.

 

Elantra sales are down 31.6 per cent this year, continuing the trend of last year across which it tumbled 31.2 per cent to 2644 units – just 8.5 per cent of combined i30/Elantra sales, with the dominant hatch recording 28,378 sales (+0.5%). This year, i30 sales are up 9.7 per cent to 4190 units.

 

Corolla is also firing this year with the sedan version added last December, with combined hatch and sedan sales up 9.0 per cent to 4890 units at the end of February.

 

This is in part also due to the fact that Toyota is offering a hybrid powertrain for only a $1500 increment over the equivalent combustion-engined variant, which is proving to be a hit with buyers.

 

The new Elantra, too, has been developed with a hybrid powertrain, but there is no ‘i30 Hybrid Sedan’ on the horizon.

 

Mr Thomas said “we’re not going to rule it out completely” but told us the petrol-electric Elantra was not available in right-hand drive at this stage, and so would not be available at launch – if ever, given that making the business case work would be difficult.

 

Hyundai’s fresh attention to the small passenger vehicle market is understandable considering the lucrative nature of this segment – currently the second-biggest category this year, behind only mid-size SUVs – and the Elantra clearly has plenty of room for improvement.

 

Sales have been falling on an annual basis since 2017, and it remains a long way shy of the 8000-plus units it was setting down each year from 2012 to 2015.

 

For the i30, sales have held firm at around 28,000 for the past three years, but this is from a height of almost 38,000 in 2016.

 

Mazda recently told us that it no longer expects to achieve the 40,000-plus annual sales the Mazda3 was racking up during that period because the market has shifted to SUVs and buyers are turning to small and light crossover model lines.

 

That said, no one would rule out Toyota – the dominant force in the marketplace – getting back to that mark.

 

And Hyundai?

 

Its climb back up the charts with a broadened i30 range looks to be a tough assignment, but HMCA has rolled the dice and now we watch with interest to see whether the gamble pays off.