1 a. the fleet market: challenges and strategy table of content a. a.1. europe: challenges and...

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A. THE FLEET MARKET: CHALLENGES AND STRATEGY

TABLE OF CONTENT A.

A.1. Europe: Challenges and Strategy

A.2. Challenges and Strategy for the network

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A.1. EUROPE: CHALLENGES AND STRATEGY

> Introduction> The stakes for Hyundai Motor Europe> The stakes for Hyundai's network> “The fleets”: what are they?> The fleet market

▶ PROFITABILITY▶ MARKET SHARE▶ MATURITY

> The European market: the players in the fleet market

TABLE OF CONTENT A.1,

A.1.1. The global context

> The means implemented by Hyundai Motor Europe> The necessary evolutions of the network> Fleet Business Centre Manual> Fleet Academy

A.1.2. Hyundai’s approach

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Introduction

In the Mature European Market, vehicle sales to private customers has stagnated in the last few years. At the same time sales to business customers continues to strengthen in most countries.

After a massive drop in 2009, due to the Financial crisis, the Fleet Market is recovering. The Fleet Business accounts for 52% of the EU car market.

In the countries which recently entered the European Union, the purchasing power remains weak and the convergence of the prices due to this return is not favorable for the sales of new cars to private customers. In these countries the purchase of new vehicles are increasingly carried out by the fleets having the financial means allowing them to acquire these vehicles.

To play a significant role in the European Market, it is necessary for Hyundai Motor Europe to increase its positioning. To achieve this goal it is absolutely necessary to be one of the brands that are considered by this segment of customers.

In this context, all car manufacturers and contract hire leasing companies are focusing on the fleet and business market.

A.1.1. Europe: the global context

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The strategic stakes for Hyundai Motor Europe (1/2)


> Volume

▶ The current Hyundai market share on True Fleet is at 2,4%▶ Hyundai True Fleet market share targets 2015-2020: 2,5% to 5%

> Distribution and -as a consequence- the stability of the distribution network

▶ Maintaining the current Fleet Business Centres coverage across Europe

• 425 FBCs

▶ Upgrade high quality service for fleet customers

▶ Monitoring the FBC‘s performance in both, quantity and quality

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The strategic stakes for Hyundai Motor Europe (2/2)


> Control of the relationship with the customer

▶ CLEAR DEFINITION ON FLEET CUSTOMER TARGET:

17.8%2,564

INTERNATIONAL(101+)

LARGE(26-100)

MEDIUM(6-25)

SME(1-5)

COMPANY TYPE CARS IN CAR PARK COMPANIES

22%3,161

24.1%3,466

36.2%5,204

0.6%12

2.3%47

9.9%204

87.3%1.844

INTERNATIONAL FLEET SALES

NATIONAL FLEET SALES

DEALER & FBCS

(Car park size) (Volume in thousands) (Number of relevant companies in thousands)

> Profitability and consolidation of the margins

▶ SHIFTING FLEET SALES APPROACH FROM HIGH DISCOUNTS TO COST OF USE DISCUSSIONS.▶ ACTIVE MANAGEMENT OF THE RESIDUAL VALUES.

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The stakes for Hyundai Europe and its networks.


This means that HME and its network should work closely together.

>HME to offer: ▶ A product line adapted to the needs of the customers;▶ An offer of financing products answering to the specific needs of the fleet buyer;▶ A service package allowing a complete offering.

>Hyundai FBC network to offer:▶ a service quality corresponding to the expectations of a fleet customer;▶ professional fleet sales and after sales people positioning themselves as advisors and partners of

these fleet customers;▶ adapted services (e.g. opening schedules, replacement vehicles, quick service, …).

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The “fleets”, what are they?


The word “fleet” is often used to indicate the large accounts and the leasing companies.

In this sense it is misleading, since these large customers on average only represent 25% of the total fleet market.

The other 75% of the market are realised through the market of the “business” customer starting from the smallest level of the individual customer using his vehicle to do his job (e.g.: independent professions, small shopkeepers, craftsmen) and ending at the highest level by fleets of 50+ vehicles.

The “True Fleet” is usually defined as the non-private sales excluding demo cars and short term rental.

In other words: “True fleet” includes corporate clients, SME and leasing companies. Depending of the country, it could also include the liberal professions.

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Profitability of the fleet and business market


Why is it interesting to work with a fleet customer ?

>From one to many cars to sell to one decision maker.

>Vehicles with more frequent use and therefore a more rapid renewal.

>A more rational customer, open for a TCO discussion and contracts including services.

>The fleet client is more loyal, especially when he is familiar with the full service approach.

>Increasing market share of the fleet customers (illustrated on next screen)

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Market share of the business customers on the European market


The Fleet market 2014, all car makes together, represents 3,5 millions vehicles.

This is 27,2% of the total market.

>Significant growth in Southern Europe and UK

>Importers achieved higher increase rate than Domestic brands

>Growth in True Fleet Channel (+10%) was higher than in retail Channel(+2%)

>True Fleet market expected to grow till 2020 by 17%

True Fleet Market Development & forecast

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

3998

2753

31863502 3368

33093474

36063725

3832 3953 4029 4057

27,0%18,8%

23,0% 25,6% 26,8% 26,7% 27,2% 27,4% 27,5% 27,5% 27,7% 27,7% 27,7%

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The more the fleet is important, the higher the Full Service Leasing is adopted


100%

90%

80%

60%

20%

10%

0%

50%

40%

30%

70%

1-4 5-9 20-100 >100

FINANCING METHODS ACCORDING TO FLEET SIZE

FSL

LEASING

CREDIT

CASH

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The more the fleet is important, the more the expectations are manifold and complex


Salesman skills, after sales

services

COST OF THE INVESTMENT THE HOLDING THE USE

EXPECTATIONS

SERVICES

BUDGETING

RISK MANAGEMENT

SERVICE51 %

LARGE FLEETS AND INTERNATIONAL COMPANIES; PERK CARS AND ESSENTIAL USERS…

INDEPENDENT PROFESSIONS AND SMALL COMPANIES

FINANCING45 %

VEHICLE

DISCOUNT

FINANCING METHODS

FISCAL ADVANTAGES

FROM SMALL TO LARGE

MANAGEMENT 4 %

ADMINISTRATION, MANAGEMENT

MULTICRITERIAL ANALYSIS

PRIVATE CUSTOMERS AND CRAFTSMEN. RISK OF DISCOUNT TRAP.

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The European market: the players in the fleet market


> Click on the visuals to see what the different players are interested in:

SERVICEVEHICLE FINANCING

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VEHICLE

14





LEASING

FINANCING

15





SERVICE

LEASING

INSURANCE

TIRE COMPANY

16





SERVICE

LEASING

VEHICLE

LEASING

INSURANCE

TIRE COMPANY

FINANCING

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SERVICE

Conclusion:

only the car manufacturer

proposes the full mobility solution to its customers

LEASING

VEHICLE

LEASING

INSURANCE

TIRE COMPANY

FINANCING

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The means implemented by Hyundai in Europe


> A - Human Resources.▶ A centrally adapted commercial organization in each country.

> B - The products:▶ A variety of models targeted to appeal the business market▶ All new Light Commercial vehicle▶ A plan of new models within 1 year which will allow HME to become a serious competitor in the

business market

> C - A package of financing and service offerings adapted to the needs of the

fleet and business customers.

> D - Commercial methods and network standards adapted to the fleet market.

> E - Marketing and communication tools specifically for the fleet market.

> F - A Fleet Academy training programme.

> G - A Remarketing Programme (illustrated on next screen).

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Remarketing Programme


> Purpose:▶ Develop global naming for Certified Pre Owned program vitalization and better customer communication

> Naming :▶ Emphasizing Credibility: “H” means Hyundai heritage with high quality and “Promise” means Hyundai’s credible

promises to customers

> Expectations:▶ Quantitative Growth: Sales focussed CPO business▶ Brand Management: Use global CPO naming for brand leadership and modern premium▶ Market: Efficient management through UC awareness and Synergy effect with Hyundai brand▶ Dealer: Increase dealer profit through UC awareness and Support NC sales through increasing RV’s▶ CS: Increase customer credibility for Hyundai UC and Increase customer expectation for service / warranty

> Benefits:▶ Increased trust in Hyundai used cars▶ Grow profitability of used car business▶ Improve brand image & gain new customers▶ Increase residual values of used cars▶ Optimize used car management of the dealer network▶ Support new car sales▶ Constant delivery of Hyundai’s confidence on approved vehicles to customers▶ Increase of level of customer satisfaction by providing confidence in high quality and improving the overall residual

value’s▶ Modern design to attract new and young customers

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The necessary evolutions of the network


> The implementation and the strict application of the 2-Tier standards.

> Creating a consistent standard within the Hyundai Fleet Business Centres.

> Providing an evaluation of salesmen capable of dealing with fleet customers, for Fleet Business Centres.

> Selected fleet salesmen have to follow an adapted training programme with further assessments.

> Implementation of Fleet specific services.

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Fleet Business Centre Manual


> An interactive application

> Rolled-out in European countries together with the local organisations

> To help the 425 FBCs to raise their expertise and better serve the fleet customer

THE FLEET MARKET

THE FLEET BUSINESS CENTRE

MY ACTION PLAN

COACHING

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Fleet Academy Training


> A program on 2 years and 3 Levels

> E-learnings and Class Trainings

> Rolled-out in European countries together with the local organisations

> An initial assessment ensuring the right level of the trainees

> Concluded by 2 official certifications

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FLEET ACADEMY TRAININGThere are in total 4 class trainings, each of 2 days …

a.m.

p.m.

day 1 day 2 day 1 day 2 day 1 day 2 day 1 day 2

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FLEET ACADEMY TRAINING… covering the themes that will help you to speak at the right level with fleet customers …

CT1 : Fleet Basics+ Doing business with

small companies Part 1

CT2 : Doing business with small companies Part 2+ Medium companies

CT4 : Doing business with medium companies

CT3 : New Business conquest

Legend:

CTx = Class Training x

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FLEET ACADEMY TRAINING… grouped in 3 levels of expertise …





FLEET ACADEMY LEVEL 1 LEVEL 2 LEVEL 3


Legend:


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FLEET ACADEMY TRAINING… the last afternoon of Levels 1 and 3 are concluded with a Certification of the salesman …







Legend:


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FLEET ACADEMY TRAINING… 9 e-learning modules help the trainee to attend the class trainings with the right basic knowledge …

E1 E2

E3 E4

E6 E7

E8 E9

E5


Legend:

Ex = e-learning x CTx = Class Training x






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FLEET ACADEMY TRAINING… and an initial assessment ensures that the salesman starts the training at the right level:


small companies Part 1 (DURATION 1D + 1D)

CT2 : Doing business with small companies Part 2+ Medium companies (DURATION 1D + 1D)


E1 E2

E3 E4

E5

E6 E7

E8 E9



Legend:

Ex = e-learning x CTx = Class Training x

(DURATION 1D + 1D) (DURATION 1D + 1D)

SCORE < X%

SCORE < Y%: E1 E2 E3 E4

SCORE > Z %: E1 E2 E3 E4 E5

1 a. the fleet market: challenges and strategy table of content a. a.1. europe: challenges and...

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