July, 2011 – South Korean auto maker, Hyundai Motors, has appointed the home-grown Vehicle and Equipment Leasing Limited (VAELL) as its official leasing partner across East Africa.
The announcement was made by Hyundai Motors East Africa, a five months old subsidiary company, as it marked the sale of its 70th unit since it started operations in Kenya earlier in the year.
“Our study of emerging trends in the East Africa Auto Market found that leasing is the fastest growing new industry. As an aggressive new-car seller we see it as an enabler and are happy to announce partnership with local pioneer leasing company, VAELL,” said Sam Lee, the Regional head of marketing.
Hyundai Models were first introduced in East Africa by an Indian company in the 1980s but the company went under in mid 1990s amidst customer complaints of poor technical support. This new company is however not related with the older company and is owned and managed by Koreans.
Paul Njeru, CEO at VAELL, said the leasing partnership will be strategic for Hyundai, as it makes a comeback to the East Africa market, and could potentially help the company’s new car sales rise by 20%.
“It is important to observe that Hyundai is a quality car maker that is presently best selling in Europe and 2nd best selling in SUV and Saloons in Africa, we expect surprising performance by these models,” he said.
VAELL is the region’s most successful proponent of the “operating lease”, an asset acquisition practice which features the use of production plants, machineries and vehicles by companies, without the company actually owning them.
According to Njeru, VAELL which has over ten year old leasing experience is presently moving 400 to 500 units annually.
“Apart from East Africa, where it has been absent for ten years, Hyundai is the fastest selling brand elsewhere. In Europe it is the leads in volume sales while in Africa, it is the 2nd best selling model. We expect its comeback to be boosted by corporate leasing,” he said.
Amongst the models Hyundai East Africa is stocking in its Nairobi showroom are sports utility vehicles like Hyundai Santa Fe, the Hyundai ix35 and the Hyundai Tucson, as well as saloons like the new Elantra and the Accent.
Lee says the company has invested heavily in spare parts availability to avoid the pitfalls that caused the poor success of Hyundai models before.