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· The Dude
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Brian Harper, National Post
Published: Friday, November 21, 2008

Sixth in a series of profiles of executives in the Canadian automotive industry

President and CEO of Hyundai Auto Canada since 2002, Steve Kelleher is about as close to the word "lifer" as can be applied to the automotive business, having been with Hyundai for 22 of its 25 years in Canada. As such, he has seen the company go from a one-product offering -- with the Pony econocar -- to a full-line distributor and has watched Hyundai grow into the fifth-largest vehicle manufacturer worldwide.

He recently sat down for an interview.

Brian Harper Give me a status report on how Hyundai Canada is doing.
Steve Kelleher We're doing great. Year to date, sales are up 10% over last year. We're outperforming the industry and that's always good. We expect to finish up 10% over the whole year, which means we will have had our best year ever. That means over 80,000 units, which beats a record going back to 1985 when we sold 79,000 Ponys. Couple that with the fact that it's our 25th anniversary in Canada [and] it means things have really come together this year.

BH How are the stock market fluctuations affecting business?
SK Every company, not just automotive, is trying to grapple with that. I think we're in for a challenging year [in 2009] just from an economic standpoint. I think we're getting close to a recession if we're not already in it. And I'm worried about the job losses that are going to hit us, especially in Ontario. From our standpoint, we have always been very frugal, but, maybe [we'll be] even more so going into next year. It's changed a lot of our plans. We're going to stick to our core business and batten down the hatches.

BH Despite having a lineup that is well represented with fuel-efficient engines, Hyundai appears to be noticeably absent when it comes to discussion of initiatives such as hybrid or diesel powertrains.
SK There are a lot of initiatives. The R&D spending for this year for Hyundai Motor Company jumped to 5.3% from 4.8% of the company's total expenditure -- almost $2-billion. And most of that has been focusing on improving fuel economy. That doesn't just mean new technology in hybrid or electric [vehicles]. Hyundai's stated priority is that, with each new product launch we have, that new product will be the most fuel efficient in its class ... I think Hyundai's product fleet will be the most fuel efficient in Canada and the U. S. by 2015. Right now, I think we're third behind Toyota and Honda. There's also been a lot of hybrid research and we're very close to bringing hybrids out. Our first hybrid in North America is going to be the Sonata in 2010 ... the Santa Fe is next.

BH What does the Genesis represent for Hyundai? Do you expect great things from it or is it more of a halo-effect car, demonstrating what Hyundai is capable of producing?
SK [Winning AJAC's Best New Luxury Car Under $50,000 award was] a good start for that vehicle. It's a great vehicle for us more for its halo effect and to show people, again, what our factories can turn out ... In some parts of the world, especially in the U. S., they are expecting some volume out of the Genesis and they'll probably get it, although, with the economy, the times might not be best for launching that type of vehicle. Touch wood, I think it will do very well in Canada, albeit we have a much smaller market ... It's very tough to market that vehicle through a mainstream franchise because it really is a luxury vehicle. And that type of buyer will tend to like to have a luxury [name] on the back [of the car] ... But it's such a good car that it's going to make some inroads.

BH The last couple of years has seen Hyundai move to larger products, i. e., the Entourage, Veracruz and now Genesis. Are they being accepted or is Hyundai still thought of as a small-vehicle manufacturer?
SK We have to show people we can produce a total array of vehicles and do a very good job at it. And it's our job as a sales and distribution operation in Canada to get people to try them. If we are going to grow, we are going to have to have that acceptance ... at the higher end of the market. So, yeah, the Veracruz has been well accepted. It's hit all the targets. I'm confident that Genesis is going to hit its targets here in Canada. [The] Entourage is a tough one. It's in a dying segment. It has nothing to do with the product, it's a great product, [but] people are moving away from minivans.

How do you see Hyundai in 10 years time?
SK I know we will grow. I believe in 10 years time we will be a Tier One company in Canada. I believe that when people talk of desirable automotive brands, the words Honda and Toyota won't be the only ones coming out of their mouths; it will be Honda, Toyota and Hyundai. We will be a brand that people in Canada buy not only because we offer great quality at affordable prices and a good value -- that will continue -- but because they want to. It will be my goal to at least get the company to fifth position in sales in Canada. And I think that is very doable. Right now we're between seventh and eighth ... We're a very tenacious company. We will get there just because we want to, even if it kills us.

BH Do you get tired of all the comparisons regarding where Hyundai was 25 years a go with the Pony and where it is today?
SK Yes, I do ... There's a whole generation [of consumers] who don't know what the Pony is.

Thank God.



Name Steve Kelleher Age 56

Born Toronto

Title President and CEO

Company Hyundai Auto Canada Education Bachelor of Science, Business Administration from Cornell University, MBA from York University

Previous work experience Vice-president of sales, marketing, parts and service, 1997-2002; director of parts and service, 1995-1997

Personal Married with two teenaged children. Pastimes include coaching hockey and (occasionally) golf First car Datsun 1200

Currently drives 2009 Genesis V6 Role model Father, who taught him the work ethic. Also, Scott Haltom, a former U. S. Marine colonel who came to help set up Hyundai's parts warehouse 25 years ago, and who passed on his experience and taught Kelleher how to manage people Favourite saying God grant me the serenity to accept the things I cannot change; the courage to change the things I can, and the wisdom to know the difference.
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