* Hyundai to launch van with Turkey's Karsan in 2015-source
* Renault already sees tougher van market
* VW, Ford among manufacturers shifting to lower-cost sites
By Laurence Frost and Gilles Guillaume
PARIS, May 15 Hyundai is preparing
to enter the European commercial van market with a Turkish-built
vehicle, a source said, adding to signs that Renault and PSA
Peugeot Citroen could lose their grip on a lucrative part of the
The South Korean automaker will debut a large van at
September's Hanover truck show and begin production with Turkish
partner Karsan next year, a person familiar with the
plan told Reuters. Hyundai declined to comment.
The move follows Volkswagen's decision to build
a second light commercial vehicle (LCV) in a lower-wage country,
shifting its Crafter van to Poland from Germany.
Both new programmes underscore toughening competition in the
van market, which has already seen margins squeezed by heavy
discounting but remains more profitable than mass-market cars.
That poses a particular risk to French market leaders
Renault and PSA Peugeot Citroen, which could
now see models built in costlier western European plants, such
as Peugeot's Boxer, Citroen's Jumper and the Renault Master,
undercut by vans made in lower-cost countries.
"Light commercial vehicles are the category where
competition is really much more fierce than before," Renault
sales chief Jerome Stoll told analysts on a recent call.
While LCVs account for only about 10 percent of all European
vehicle sales, they make a significantly larger contribution to
But discounting is intense despite recovering demand, which
saw European van sales rise 9.9 percent in the first quarter.
Few manufacturers break down their profitability by vehicle
type. Analysts say the estimated margins on the French groups'
vans were about twice the 3-4 percent made on cars in better
years preceding the 2008 financial crisis.
"If LCVs were a 6-8 percent margin business in the past,
this may deteriorate for some as the cost spread between
manufacturers widens," said Erich Hauser, an analyst at
brokerage ISI Group in London.
"VW would have been quite happy building its vans in Germany
for ever, so clearly something has changed in this market."
Resisting the exodus from western Europe, the French have
kept most production at home or in some cases even repatriated
vans to fill gaps left by axed or offshored car programmes.
Vans replaced cars at Renault's Maubeuge plant more than 20
years ago. The company is now moving its Trafic van from Spain
to another northern French site as its ageing Espace and Laguna
car models wind down.
Renault's budget Dacia brand also builds vans in Morocco and
Romania, accounting for a modest 7 percent of regional sales.
Peugeot is introducing new vans to its Sevelnord factory in
partnership with Toyota to replace discontinued
people-carriers previously built with Fiat.
While the two French groups still lead European
registrations, their combined market share fell to 36.7 percent
last year from 39.4 percent in 2010, IHS Automotive data shows.
VW's share rose to 13.2 percent from 10.6 over the same
three years. Ford, which halted UK production of Transit
vans in 2012-13 to concentrate output in Turkey, advanced almost
one point to reach 11.6 percent of the European market.
Backed by its lower-cost production, the U.S. automaker is
gaining ground with attractive discount offers on even its
newest van models, ISI's Hauser said.
EurotaxGlass's, a leading market data provider, has charted
a surge in price-cutting moves such as pre-registrations - where
dealers receive new vehicles to sell as used.
Such margin-crushing van sales have increased 15-20 percent
by volume since 2008 even as the overall market shrank by a
quarter, technical director Dean Bowkett said.
"There are significant levels of discounting going on even
in commercial vehicles, which is unusual," he said.
"Historically it's always been cars that have been laden
with pre-regs - but we're now seeing it with commercial vehicles
Hyundai has yet to finalise pricing and other launch details
for its new vehicle, according to the source, who described the
production deal with Karsan as "a toe in the water".
Karsan, based in Turkey's industrially developed Bursa
province, already builds Hyundai light trucks for the local
market as well as vehicles for other manufacturers' brands.
VW assembles its smaller existing Caddy van in Poznan,
Poland, and is investing 3.4 billion zlotys ($1.1 billion) in a
nearby plant to begin making Crafters in 2016, ending joint
production with Daimler in Germany.
Stephane Chesnel, Peugeot's head of leasing to major fleet
clients, said the prospect of a second Polish-built VW van was
unlikely to alter the French group's immediate plans.
"That is Volkswagen's choice, but we are not changing our
production as things stand today," Chesnel said in an interview.
Beyond the rebounding sales volumes, however, Chesnel sees
signs that recession and austerity may have shaped demand in
ways that prevent a return to pre-crisis margins.
"Clients used to order vans with more capacity than they
needed," he said. "Now they look closely at their requirement
and try to reduce the volume of the vehicles they buy."
($1 = 3.0557 Polish Zlotys)
(Editing by Mark John and Mark Potter)