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[INTERVIEW] Hyundai Capital sees epic growth overseas

Paul Skiadas, head of the global business division of Hyundai Capital, speaks at his office in Seoul in this file photo. / Courtesy of Hyundai Capital
Paul Skiadas, head of the global business division of Hyundai Capital, speaks at his office in Seoul in this file photo. / Courtesy of Hyundai Capital

Auto financer supports pandemic-hit customers, dealers

By Park Jae-hyuk

The year 2019 was definitely meaningful for the global business of Hyundai Capital which operates in the United States, Canada, Brazil, Germany, the United Kingdom, Russia, India, China, Australia and Singapore.

The auto financer first expanded overseas in 1989 with Hyundai Auto Finance in the U.S., which later became Hyundai Capital America (HCA). Last year marked the 30th anniversary of its overseas business and its combined financial assets from operations outside of Korea for the year surpassed 50 trillion won ($40 billion), nearly double the size of its domestic assets.

Such outstanding growth could be achieved through the company's differentiated strategies, according to Paul Skiadas, who is in charge of directing the global businesses of Hyundai Motor Group's financial services arms ― Hyundai Capital and Hyundai Card.

He told The Korea Times in a recent email interview that localization, an integrated work system and a joint venture strategy have enabled his company to leapfrog into the position of a "global financial company," not just another Korean financial company doing business abroad.

"Our epic growth overseas was made possible by a thorough analysis of each local market," said the Australian executive who joined Hyundai Capital in 2015.

As an example of localization, he cited a "GPS product," which was launched in 2016 by Beijing Hyundai Auto Finance to offer higher credit limits to customers who agreed to install GPS trackers in their cars.

"GPS functions as a tool to monitor conditions and locations of vehicles which are physical collateral for financing," he said.

"Given managing credits of individuals in China is not easy due to its large population and underdeveloped credit ratings system, managing customers' credit cost a lot. At the same time, this has given customers the benefit of using cars at a reasonable cost."

Regarding their joint venture strategy, Skiadas noted his company has strived for efficient and optimal business operations overseas to increase customer benefits, rather than increasing unnecessary initial costs by entering foreign markets as a standalone entity.

"We're operating in three countries as joint ventures with the Spanish financial company Santander. Our Chinese entity is also a joint venture with Chinese firm Beijing Automotive Industry," he said.

"We chose to enter those markets as joint ventures in order to take advantage of our partners' knowledge in the local market and hedge against risks from entering new markets."

His company adopted the joint venture strategy for Hyundai Card's overseas expansion which started with the card firm's entry into the Vietnamese market last year.

Hyundai Card signed a contract with Finance Company Limited for Community (FCCOM) in October 2019 to buy a 50 percent stake in the Vietnamese consumer finance firm for 49 billion won.

"FCCOM, a subsidiary of medium-sized Vietnamese bank MSB, will be operated as a joint venture between us and MSB," Skiadas said.

"We will transplant our advanced financial knowhow in various areas of business, including financial product development, marketing, risk management and digital financing, whereas MSB will be responsible for sales and servicing operations."

Hyundai Card seeks to begin operation of the joint venture in the second half of this year, maximizing the synergy effect in the Vietnamese market through joint marketing with Hyundai Motor and Kia Motors.

Responses to COVID-19

This year, however, has been challenging for Hyundai Motor Group's financial services units so far, unlike 2019.

After the outbreak of the COVID-19 pandemic, Fitch lowered the outlooks on Hyundai Capital and Hyundai Card to negative from stable, while S&P Global Ratings placed Hyundai Capital on a negative watchlist.

Skiadas admitted the global automotive and auto finance industries have faced difficulties from the reduced social activities.

Yet, the executive said his company has strived to find breakthroughs despite such difficulties, coming up with ways to provide support for its customers and dealers.

"Although it varies from country to country and from vehicle model to vehicle model, we've allowed deferment and waiver of installment payments for up to 120 days," he said.

"We've carried out another program named 'Hyundai Assurance. Job Loss Protection' with Hyundai Motor in the U.S. since March to provide customers who lost their jobs with up to a six-month waiver of installment payments for new car financing or leasing."

He added that new products with lower down payments and monthly installments are being developed for the post-pandemic era.


Paul Skiadas, head of the global business division of Hyundai Capital, speaks at his office in Seoul in this file photo. / Courtesy of Hyundai Capital
Paul Skiadas, head of the global business division of Hyundai Capital, speaks at his office in Seoul in this file photo. / Courtesy of Hyundai Capital

Auto financer supports pandemic-hit customers, dealers

By Park Jae-hyuk

The year 2019 was definitely meaningful for the global business of Hyundai Capital which operates in the United States, Canada, Brazil, Germany, the United Kingdom, Russia, India, China, Australia and Singapore.

The auto financer first expanded overseas in 1989 with Hyundai Auto Finance in the U.S., which later became Hyundai Capital America (HCA). Last year marked the 30th anniversary of its overseas business and its combined financial assets from operations outside of Korea for the year surpassed 50 trillion won ($40 billion), nearly double the size of its domestic assets.

Such outstanding growth could be achieved through the company's differentiated strategies, according to Paul Skiadas, who is in charge of directing the global businesses of Hyundai Motor Group's financial services arms ― Hyundai Capital and Hyundai Card.

He told The Korea Times in a recent email interview that localization, an integrated work system and a joint venture strategy have enabled his company to leapfrog into the position of a "global financial company," not just another Korean financial company doing business abroad.

"Our epic growth overseas was made possible by a thorough analysis of each local market," said the Australian executive who joined Hyundai Capital in 2015.

As an example of localization, he cited a "GPS product," which was launched in 2016 by Beijing Hyundai Auto Finance to offer higher credit limits to customers who agreed to install GPS trackers in their cars.

"GPS functions as a tool to monitor conditions and locations of vehicles which are physical collateral for financing," he said.

"Given managing credits of individuals in China is not easy due to its large population and underdeveloped credit ratings system, managing customers' credit cost a lot. At the same time, this has given customers the benefit of using cars at a reasonable cost."

Regarding their joint venture strategy, Skiadas noted his company has strived for efficient and optimal business operations overseas to increase customer benefits, rather than increasing unnecessary initial costs by entering foreign markets as a standalone entity.

"We're operating in three countries as joint ventures with the Spanish financial company Santander. Our Chinese entity is also a joint venture with Chinese firm Beijing Automotive Industry," he said.

"We chose to enter those markets as joint ventures in order to take advantage of our partners' knowledge in the local market and hedge against risks from entering new markets."

His company adopted the joint venture strategy for Hyundai Card's overseas expansion which started with the card firm's entry into the Vietnamese market last year.

Hyundai Card signed a contract with Finance Company Limited for Community (FCCOM) in October 2019 to buy a 50 percent stake in the Vietnamese consumer finance firm for 49 billion won.

"FCCOM, a subsidiary of medium-sized Vietnamese bank MSB, will be operated as a joint venture between us and MSB," Skiadas said.

"We will transplant our advanced financial knowhow in various areas of business, including financial product development, marketing, risk management and digital financing, whereas MSB will be responsible for sales and servicing operations."

Hyundai Card seeks to begin operation of the joint venture in the second half of this year, maximizing the synergy effect in the Vietnamese market through joint marketing with Hyundai Motor and Kia Motors.

Responses to COVID-19

This year, however, has been challenging for Hyundai Motor Group's financial services units so far, unlike 2019.

After the outbreak of the COVID-19 pandemic, Fitch lowered the outlooks on Hyundai Capital and Hyundai Card to negative from stable, while S&P Global Ratings placed Hyundai Capital on a negative watchlist.

Skiadas admitted the global automotive and auto finance industries have faced difficulties from the reduced social activities.

Yet, the executive said his company has strived to find breakthroughs despite such difficulties, coming up with ways to provide support for its customers and dealers.

"Although it varies from country to country and from vehicle model to vehicle model, we've allowed deferment and waiver of installment payments for up to 120 days," he said.

"We've carried out another program named 'Hyundai Assurance. Job Loss Protection' with Hyundai Motor in the U.S. since March to provide customers who lost their jobs with up to a six-month waiver of installment payments for new car financing or leasing."

He added that new products with lower down payments and monthly installments are being developed for the post-pandemic era.


Park Jae-hyuk pjh@koreatimes.co.kr

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