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Hyundai to expand into Van production


According to a source, Hyundai is getting prepared to enter the commercial van market in Europe with a Turkish built vehicle, which has added to the signs that PSA Peugeot Citroen and Renault could be losing the grip on an extremely profitable part of the automotive industry.The manufacturer, from South Korea will be debuting a large van at the Hanover truck show in September and will allegedly begin it's production with Karsan, it's Turkish partner next year.


This move follows the decision from Volkswagen to build a second LCV, light commercial vehicle in a lower wage country, that shifts it's Crafter Van from Germany to Poland. Both of these new programmes underline the competition in the van market, which is certainly toughening, it has seen margins squeezed already by heavy discounts, though remains to make more profit than with mass market cars.


How does this affect other car manufacturers?


This poses a risk particularly to PSA Peugeot Citroen and Renault, French market leaders, which essentially now could see models built in more costly western European plants, such as the Citroen Jumper, the Peugeot Boxer and the Renault Master, being undercut by vans that are being produced in lower cost countries.


Whilst only around 10% of European vehicle sales are made up of LCVs, they make a rather significant contribution to profits. Discounting is intense despite the recovering demand, which saw van sales in Europe rise by 9.9% in the first ¼ of the year.


The key figures and facts of vans from manufacturers


There aren't many manufacturers that break down profit by type of vehicle. Analysts have said that margins estimated on the French groups vans were around twice of the 3-4% that is made on cars in years that precede the financial crisis of 2008.