New Hyundai hybrids won’t eat into sales of combustion vehicles, says COO
In a rare public critique of Toyota by a rival, Hyundai Australia chief operating officer John Kett says the Korean brand will not allow hybrids to cannibalise other members of its product line-up.
The new 2023 Hyundai Kona range being released in Australia this week includes a petrol-electric hybrid powertrain for the first time, and four new Kona Hybrid variants will aim directly at the Toyota C-HR and Corolla Cross hybrids.
Speaking at the launch of the second-generation Kona – where a Tucson Hybrid was also confirmed for Australia in 2024, targeting the super-popular Toyota RAV4 Hybrid – Kett was clear that Hyundai Australia would not follow Toyota’s policy of dropping orthodox internal combustion powertrains in favour of the petrol-electric tech.
Hyundai predicts the new Kona Hybrid, which arrives Down Under in October or November, will be the sales leader in the all-new small SUV range and could account for as much of 50 per cent of sales across the full 2024 calendar year.
It is also optimistic the upcoming Tucson Hybrid, which will be released locally in the first half of 2024 as part of a range-wide facelift for the mid-size SUV, will achieve the same thing.
Speaking specifically about Tucson Hybrid, Kett said the objective was to avoid cannibalising sales of the orthodox internal combustion engine (ICE) models, which he believed was an issue for Toyota.
“We want to see the volume that we are getting today on Tucson and see if hybrid can actually grow it and not necessarily cannibalise all of it,” he said.
“And what we are seeing from that amazing competitor group [Toyota] is that there is a risk of that.”
In adding more hybrids to its line-up, Hyundai Australia is going after Toyota, which sold more than 70,000 petrol-electric vehicle here in 2022.
Toyota has hinted it might start dropping orthodox ICE powertrains from model line-ups as hybrids dominate sales, and has promised that more than 50 per cent of its sales will be electrified by 2025.
It has already confirmed the new C-HR compact SUV coming in 2024 will be sold only as a hybrid.
But Kett made it clear Hyundai Australia was not considering the same course of action.
He depicted a three-tier ‘model walk’ that starts with orthodox ICE, adds Hybrid in the mid-tier and then progresses to zero-emissions battery-electric vehicles at the top of the range.
Unlike Hyundai, Toyota has yet to launch an EV in Australia, although it will correct that with the bZ4X before the end of 2023.
“We know the growth of that brand [Toyota] over the last 10 years has largely been driven by body-on-frame vehicles [SUVs and utes] and in… monocoque [cars and light-duty SUVs] they’ve probably lost 80,000 ICE and added 60,000 hybrid,” said Kett.
“So they haven’t been able to recover car-for-car when you back out the incredible growth in pick-ups and whatever.
“We want everyone to march forward together to an electrified state, but if you can’t get there how do we make sure we have a true ICE offering that’s price competitive and then within that a step up to hybrid if you feel you’re first step to electrified is hybrid and not the full EV?”
Hyundai Australia product and future business chief Andrew Tuitahi confirmed Toyota’s hybrid sales performance had helped shape the ambitious goal for Kona Hybrid.
“Every time they [Toyota] have launched a new model with a competitive hybrid at a good price, buyers have migrated to the hybrid over the conventional ICE car to the tune of somewhere between 30 to 70 and even 20 to 80 per cent in favour of the hybrid.
“When we look at the performance of our hybrid, where it sits versus Toyota, we think customers will make the same kind of decision.
Despite a slow start to 2023, Toyota is the dominant Australian auto sales leader, traditionally accounting for more than 200,000 sales and more than 20 per cent of the new-vehicle market.
Hyundai was fifth overall (and behind Kia for the first time) with 73,345 sales and a 6.8 per cent share in 2022 as it struggled for supply.
Kett promises sales will lift on the back of improved supply in 2023 but declined to nominate specific sales targets. However, he did say he was confident the brand could return to number three in Australia without a ute, which remains unconfirmed.
“We are confident we are going to finish the year with year-on-year on growth and some gain in share. We are pretty confident in that.”
Hyundai recorded sales over 100,000 in Australia for three years in a row between 2014 and 2016, but that was on the back of large fleet sales and was not sustainable financially.
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Keyword: Toyota hybrids cannibalising petrol vehicle sales, says Hyundai