Symptomatic phenomenon in the spring of 2020: the Russian office of Hyundai announced the launch of the Business Mobility program, under which long-term car rental for legal entities will be available. This service is interesting in that it has become one of a series of new approaches by which the Russian auto industry and the automotive business are going to confront the crown crisis.
Business Mobility is an operational leasing that allows legal entities to rent either one car or an entire fleet at once. At the same time, all the worries about registering cars, their maintenance, repair, insurance, paying taxes, processing (but not paying) fines and even seasonal re-shoeing fall on the service, and the client pays only for using the car and fuel.
The originality of the solution is that Hyundai Motor CIS launches leasing on its own – without the participation of leasing companies, banks or any other financial partners. That is, for Hyundai this will not be cooperation, but another type of own business in Russia. Of particular interest is the phrase that Alexey Kalitsev, head of Hyundai Motor CIS, said at the presentation of the project: “The distribution business is doomed to reduction, diversification is needed, and Hyundai has already begun the transformation from distribution to customer data management and service provision.”
That is, the change in the scheme “manufacturer – dealer – buyer” to the paradigm “car is not a product, but a service” has begun, along with the understanding that manufacturers can work with customers without intermediaries. Moreover, the coronacrisis did not cause this transformation, but only slightly accelerated the processes, because in a collapsed market, manufacturers urgently need to look for new forms of business.
The hope that the traditional sales market will recover quickly after the pandemic may not be justified: the ratio of people who urgently run to buy a car to isolate from others and those who have lost funds and have to postpone buying a car is not fully understood. Hyundai data in Russia shows that customer traffic at dealerships decreased by 30–70% depending on the region, although today only 73 of the company’s 184 dealerships operate. Corporate customers have so far confirmed only 65% of purchases for 2020. In these conditions, Hyundai will rely on measures to support demand from the state (preferential car loans will resume in May and will push sales of Solaris and Creta models), as well as on new services – cars by subscription and leasing, which do not involve the purchase of a car into ownership.
Both business and press events go online: the Hyundai Business Mobility service was presented at the Zoom Conference
The Hyundai Mobility subscription service has been operating since last year and allows you to rent a car through the application (without special pasting) for a period of one hour to one year. The choice is limited to five models in the maximum configuration: Creta, Tucson, Santa Fe, Sonata and H-1 minivan. Rates – from 700 rubles per hour for Creta to 49,900 rubles per month for the Sonata. You can pay both with an individual card and with a legal entity account, but one user can rent only one car. Today, approximately 500 clients use this service in Russia, and interest increased in April. The Genesis Mobility program, which will be launched this year, will be similarly organized.
And the Business Mobility service differs from them in that it is more flexible and focused only on legal entities. You can rent any models of the Hyundai and Genesis brands in any configuration and in any quantity for a period of 12 to 60 months with a mileage limit of 180 thousand kilometers. Rates will be formed individually for each car, and points of issue will be all 184 dealerships in Russia. Hyundai expects that this leasing service will replace approximately 20-30% of sales in the traditional sector of corporate clients.
Moreover, Alexey Kalitsev hinted that in the future he does not exclude the use of the Business Mobility platform for goods and services other than automobiles. However, he did not disclose the details of this curious idea, but said that in October Hyundai will also launch its own full-fledged online store, where you can not just book a car as it is now, but fully configure the car, choose additional services, pay for the purchase and arrange delivery without offline rituals such as phone conversations with the manager or visits to the salon.
The dealer community is unlikely to be happy with such an innovation, because sellers will lose the opportunity to make “special offers” with additional services included. But no one promised that the transformation of the business from the distributor-dealer model to the producer-user model would be painless.
It is interesting that the launch of the Hyundai online store in Russia should coincide with the release of four new products at once. At the end of the year, sales of the Genesis GV80 crossovers and the new generation G80 sedan, as well as the large Hyundai Palisade SUV and the new Elantra sedan, will simultaneously begin. True, this coincidence is coincidental: the task of promoting new products only online is not worth it, the car market in Russia will long be tied to traditional dealers.
By the way, of the four debutants, the GV80 crossover is most interesting, on which, in fact, the success of the entire Genesis brand depends: according to Hyundai’s calculations, its launch should increase Russian Genesis sales by 2–2.5 times, and the share of the GV80 among other models will be 60 % If this does not happen, then the experiment with reaching the premium will be difficult to consider successful, because last year Genesis sold only 1994 cars in Russia – 4.5 times less than Volvo. A 2.5-fold increase in this result means that Genesis has a chance to get around Infiniti (3,364 cars in 2019). But the “German troika” and Lexus are still very far ahead, and to get closer to it, the Korean brand should have several compact crossovers at once, and the second GV70 SUV should be expected only at the end of 2021.
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