The FINANCIAL — “The number of women that own cars in the country is growing progressively. The share of women drivers is rising year on year. This is evident at Hyundai as well,” David Giorgobiani, Director of Hyundai, told The FINANCIAL.
The FINANCIAL — “The number of women that own cars in the country is growing progressively. The share of women drivers is rising year on year. This is evident at Hyundai as well,” David Giorgobiani, Director of Hyundai, told The FINANCIAL. Hyundai Georgia, which currently holds around 25 percent of the local auto market, sold up to 1,000 units last year, out of which almost half were to women.
“The number of cars in Georgia is growing very fast but I believe that the rate will soon decelerate. This concerns our company as well. Sales will become more stable soon and slow to a certain level, not such an inflated one,” Giorgobiani said.
Hyundai Georgia plans to end 2012 with having sold 1,300 cars. The business has been experiencing big annual sales growth. The goal for 2013 is to sell 200 more cars, which will then take it up to a total of 1,500 over the year.
About 100 cars are sold every month at Hyundai Georgia, which is quite a good rate for the small Georgian market.
Today Hyundai offers twelve models. In recent years Hyundai started manufacturing premium-class cars. The Georgian dealer already has the Hyundai Equus available to customers for USD 72,000. This year they have added five new models and a presentation of the new Santa-Fe is planned for November 2012.
“We have added five new models, these include the Accent, Elantra and Santa-Fe as well as a premium-class model, which is significantly supporting sales growth,” David Giorgobiani, Director of Hyundai, told The FINANCIAL.
As for the most popular models, 4×4 cars are still very popular at Hyundai. The price of a Santa-Fe varies from USD 28,000 to USD 35,000 while the ix 35 costs from USD 23,000-29,000. The Elantra and Accent are the most popular sedans. An Accent costs USD 14,000 while the price of an Elantra is USD 15,500.
“We already have plans lined up to add two new models next year,” Giorgobiani claims.
At the present moment Hyundai is one of the leaders in the Georgian auto market. At the beginning the Hyundai representative office in Georgia was only small. Only about seven people were working there at the start, but since that time we have grown and developed quite successfully. The company now has a good infrastructure and large client base. The company’s employees number up to 100. Hyundai is operating in three directions which are cars, commercial cars which are used for distribution, and special machinery.
Q. Are you planning to bring new brands in to Georgia?
A. Not at the moment. We had planned to in 2007 but we changed our minds for certain reasons. If we were to have brought in a new brand, it would have been our competitor, which would not have been good for Hyundai. We thought about premium brands as well, but the market was not ready for it at the time. If we were to have done that we would have had to invest a lot, and it wouldn’t have brought us significant profit. So we decided to drop the idea. Fortunately we did, because the Georgian-Russian war in 2008 then influenced business in the country in a very negative way.
Q. Premiums brands including Porsche are selling well now. So why do you still not want to offer any premium brands?
A. First of all, we already have a premium model of Hyundai itself. As for Porsche, it was the first flow that sold well. Let’s see how the process develops. But still I do not consider premium-class sales to be satisfying enough in Georgia.
Q. Who are your main competitors in the market?
A. Our main competitors are Toyota and Kia in both local and global markets. In spite of Kia being a member brand of our group, it is still our competitor.
Nowadays Hyundai is among the top three global car companies. This brand has experienced great progress. When we started sales of Hyundai, it was not even among the top ten brands here.
Q. How does the used car market compete with you?
A. The used car market is competing with us as seriously as the other official dealers. Used cars are sold approximately nine to ten times more than new ones.
A great deal of used cars is imported in Georgia and the state has supported this process. Unfortunately there is no ecological control in the country. This has to be regulated. The import of used cars has become an important financial source for the country as it held one of the leading places in foreign trade. Georgia is a free industrial zone and distributes used cars in the Caucasus as well as in Central Asia. Therefore lots of successful businesses are operating in this sector. So the state preferred not to pay attention to ecological regulations. Let’s see what the new government chooses to do in this regard. If we want to integrate with EU, certain regulations definitely have to be set. Such a move would also support our sales significantly.
“Members of the middle and upper social classes make up the majority of our customers. At the same time, Hyundai offers quite a flexible leasing system which enables anyone of any income to afford one of our cars. For example, we have had cases of clients paying just USD 100-150 a month. From my point of view, this is quite acceptable considering the average income of the Georgian population. Hyundai customers are of various ages. Their ages range from 20 up to 50.
Many Georgians are pretentious. They pay a great deal of attention to the comfort and design of a car. For that reason new models sell reasonably well. We have lots of clients who are frequently replacing their cars with newer models. They don’t want to be behind the new trends, so they try to replace existing car models with new ones as soon as they appear on the market.
Q. How many service centres do you currently have? Do you plan to expand your chain?
A. We have our main centre on 12th km David Agmashenebeli Alley, which is large and comfortable for our clients. Another service centre will be opened soon in Rustavi. Mate Motors is our official dealer in Adjara as well. We have been planning to expand the chain for a long time, however we had some problems because of the Georgian-Russian war in 2008. Expansion of the chain is a part of our strategy but we are more oriented on finding dealer companies who will operate activities with our name than on opening our own branches.
Q. What is the amount of investments put in to the business since 1997?
A. The entire amount of all investments is quite large. At the start we, a small staff force, were just working in a little office which we were renting. Since then our infrastructure has improved drastically. Our head service-centre was opened in 2007 and the investments put in to it surpassed USD 3 million.
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