SYDNEY: Unfavourable exchange rates continue to dog Hyundai Australia, playing havoc with its plans to import an all-new replacement for the popular i20.
While the Australian-delivered i20 is presently sourced from India at an affordable price, the model that has superseded it in Europe is only built in Turkey.
With the Australian dollar currently only buying 70 Euro cents and profit margins already slim in the light and sub-light segments, the business case doesn’t stack up for the Turkish-built new-generation i20.
And nor does it stack up for the even smaller i10 city car, which has also been on Hyundai Australia’s wishlist but is also only sourceable from Hyundai’s Turkey plant
“i10 and i20, the new generation cars coming out of Europe, present a very challenging business case at that end of the market,” Hyundai Australia COO John Elsworth said to the media this week.
“Purely because it’s based around the Euro, and the Euro is proving to be a very challenging currency to work with. I’m not going to go into specifics, but with the Euro at 70 cents, it’s a bit of a challenge.”
Versions of the new generation i10 (above) and i20 are currently built in India, but according to Hyundai product planning chief Andrew Tuitahi neither would achieve sufficient crashworthiness standards for sale in Australia.
It’s not the first time the falling Australian dollar has presented headaches for Hyundai’s local operation. The three-door i30 that was introduced in mid-2013 as a $19,990 price leader was canned from the lineup last year thanks to worsening exchange rates.
“We stopped ordering that model over a year ago,” Elsworth said.
“We found that a very challenging car from a financial point of view, because it’s sourced out of Europe.
“Because that model sat under the five-door, keeping that price point low was something that we couldn’t commit to going forward.”
However, while models situated at the budget end of the spectrum have been deemed financially unsustainable for import, those in more profitable segments will continue to be sourced from Europe – at least for now.
Those models include the i30 Tourer and i40 sedan and tourer, while the incoming Tucson SUV (above) – which effectively replaces the ix35 when it launches in the third quarter of 2015 – will be partially sourced from Hyundai’s plant in the Czech Republic.
As reported before, the current (read: old) i20 will continue to be sourced from India at least until the end of the year, with its future uncertain beyond that.
