Keen prices keep rivals on the hop

A SUBTLE price war has developed between Suzuki and Hyundai as each takes turns selling Australia’s most affordable car.

On the basis of the manufacturer’s list pricing (plus statutory and dealer delivery charges), the just-released $12,490 Suzuki undercuts the opposition by $1500.

That includes the Hyundai Getz, which (like the Proton Savvy) is priced at $13,990 plus on-road costs.

However, the Getz is currently being offered nationally for $12,990 drive-away, while the Suzuki Alto starts at $14,990 on the road.

Speaking this week about the new Alto, Hyundai marketing and sales director Kevin McCann chose his words carefully: “It’s definitely not the best deal you can get in Australia today.”

Mr McCann added: “Price is very difficult these days. There’s a market dynamic that always makes us have to look at what’s the difference between the manufacturer’s price and the actual transaction price, where in so many cases that actual transaction price is in fact in turn, supported by the manufacturer.”

Left: Suzuki Alto.

According to Mr McCann, the Getz pricing is part of Hyundai’s regular ‘sale’ cycle.

“At this point of time that price offer is valid until the end of July,” he said, which means that the Getz will revert to its $13,990 (plus on road costs) price on August 1, making the Alto Australia’s most affordable new car.

But it may not be for long before Hyundai instigates another round of seasonal discounting.

“We tend to work in selling seasons, and not all selling seasons are the same length,” Mr McCann said.

“So we have end of mid-financial year sales, we have middle of the year sales, we have end of year sales and so on.

“And that’s when we tend apply our promotional offers, and we review the strength of those offers from time to time on a case-by-case basis, taking into account a number of factors: it could be our supply, it could be the levels of enquiry that we’re currently experiencing, it could be sales that we need to adjust or change, it could be statutory requirements – for how long can you run a price before it becomes a list price.”

So while the Getz could return to its ‘sale’ price in the next season, Suzuki general manager Tony Devers has admitted the Alto price may have to go up in six months.

The Alto is also expected to run into opposition from Hyundai’s sub-light i10 and light i20 hatches when they arrive late this year from India. In particular, the i10 will stir up the low price-point end of the market.

Hyundai plans to continue with the Getz alongside the i10 and i20 for now.

Mr McCann conceded that the Getz could not soldier on for ever: “At a point in time … the [Hyundai] sales person will have to say, ‘I can’t offer you a Getz, I can offer you option A or B’.”

Clearly option A or B are i10 or i20 – but how will Hyundai view the new Alto in light of its own sub-light car the i10 – also sourced from India?“It’s of interest to us, but we think the i10 will be positioned as a product, not as an alternative to another product.”

He went on to describe the typical buyer profile for i10 – almost perfectly describing the Alto buyer profile Suzuki described only last week. When this was pointed out to Mr McCann, he conceded that the buyer profile was “similar”.

Mr McCann also carefully side-stepped the notion that Hyundai might be looking carefully at Alto pricing in setting price for i10.

“I don’t think we’ll be taking too much notice of Suzuki’s price position with the i10,” he said.

“Our view of the i10 will be to position it relative to our model range, because if you look at the overall strategy, we’ll be looking at the i20 to go against the leading Japanese in that segment. The other models that we’ll have in the segment will be value adjusted off that.”

Hyundai and Suzuki will have further competition for the crown of Australia’s most affordable car, with Proton promising a sub-$13,000 Saga sedan to replace the Savvy late this year and both Great Wall Motors and Chery expected to be the first Chinese brands to release small passenger cars in Australia in about six months.