Hyundai Wants Consumers to Look At Them with a Fresh Perspective

By Brendan Moore

09.18.2007

Hyundai launched a $150 million USD ad campaign yesterday that is designed to prompt consumers to think of them as more than a company that makes bargain cars. Hyundai’s new ad agency out of San Francisco, Goodby, Silverstein & Partners has crafted the campaign, which includes lots of online activity, some TV spots and print ads. In fact, concerning the online activity, even the television ads direct people to the website developed to support the ad campaign, http://www.thinkaboutit.com/, which is linked to the Hyundai main site.

It’s not as if Hyundai is in trouble from a sales perspective. Hyundai’s market share in the United States is 3.1%, a bigger number than car companies like VW and Mazda. Although their sales have plateaued somewhat in the last 24 months, they had a great August last month, and look set to finish up 2007 with another good year in terms of sales. Their forecast for 2010 calls for 700,000 units sold, which is a 40% increase from the 500,000 they are trending to in 2007.

But what Hyundai doesn’t have is what they crave; that is, respect from American consumers. As consumers that are car-shopping move up in price range, Hyundai is invisible in terms of consideration. Car buyers in the U.S. look at Hyundai like they look at stuff they buy from Wal-Mart – products that have reasonable value for a low price, but nothing you’d want to brag about to other people. Unless, of course, you were bragging about the price to value ratio you achieved through your judicious shopping, which is where Hyundai gets its kudos from consumers and the automotive press.

One of Hyundai’s new print ads that compares Hyundai’s warranty coverage to well-known competitors like Toyota

Concurrent with this push is Hyundai’s intent to move upmarket and soon. Hyundai’s is counting on the Veracruz crossover, introduced in the spring, to accomplish some of this move upmarket. The loaded version of the Veracruz is priced around $37,000. And the near horizon sees a V-8-powered, rear-drive Hyundai sedan that is scheduled to arrive in U.S. dealer showrooms next summer at about the same price. Obviously, Hyundai wants to change some minds before the higher-priced vehicles show up so they have an easier time of making those vehicles go across the curb. And something that isn’t so obvious – the sales of such vehicles make the task of moving consumer perceptions up regarding Hyundai somewhat self-fulfilling; that is, the more vehicles like that that are sold, the more upscale Hyundais there are out in public to change people’s minds.

Can Hyundai pull off this improvement in customer perception of their products? It’s hard to say, but look at the progress they’ve made so far in overcoming the negative perceptions fostered by their poor-quality products of the past.

Personally, I can remember when Hyundai Excels caught on fire in the mid-80’s with alarming frequency if you turned the air conditioning on the “High” setting. I was one of their biggest critics for many years, and I have a great deal of respect for their products now, so that is my personal testament to their efforts to rehabilitate themselves here in the States.

But, moving from a value brand to a premium brand is a different journey with different mileposts along the way. It’s a tougher premise.

Ironically, Hyundai may get some help in this regard when the Chinese auto makers show up in the U.S. More companies crowding in at the bottom of the market always pushes up the customer perceptions of the companies above them. Hyundai should benefit in the comparison to the new bottom-market companies.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. I could argue that even though someone might have respect for Hyundai’s current products – and they’re certainly not bad anymore – that’s still a step or two removed from actually considering the purchase of one of them, or actually buying one.

  2. I have a new 2007 Hyundai and I love it. I certainly don’t feel like I bought a WalMart car. I feel like I got a great car at a great price. Maybe your perceptions are the issue.

  3. I could argue that even though someone might have respect for Hyundai’s current products – and they’re certainly not bad anymore – that’s still a step or two removed from actually considering the purchase of one of them, or actually buying one.

    Ditto. I respect what Hyundai has done in terms of sticking it out in the American market, but they’re not on my short list when I go car shopping.

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