Hyundai Motor's Daring Strategy Works

Auto firm expands sales 14.3 pct in U.S. with promise to buy back cars if buyers lose jobs within a year

"Its Hyundai like Sunday," exclaimed an ad during NBC TV's Super Bowl telecast, the most watched sports events on television in the United States, on Feb. 1 at a cost of $3 million, and it paid off for the company handsomely.
The company's car sales in the U.S. in January and February exploded when its rivals suffered setback after setback. Hyundai officials attributed the superb record to its ads played during the Super Bowl and its assurance to the buyers of Hyundai cars that they can return their cars if they lose their jobs or can no longer pay for the cars due to financial difficulties.
The motor company's car sales jumped 14.3 percent recently when the U.S. car market in the same period contracted 37 percent. The sale of the Sonata jumped 85.5 percent YoY in recent months. The New York Times in its Feb. 5 Internet edition said Hyundai's surprising performance is owed to its assurance that it will take back cars if customers lose jobs or are unable to pay for their cars within a year of purchase.
Vice President David Jukowski of Hyundai Motor's U.S. legal entity said the expenses involved in the assurance deal is negligible compared to the boosts in the sale of cars helped by the assurance. The U.S. daily also said the selection of Hyundai's new luxury Genesis as the Car of the Year at the Detroit Auto Show also helped the jump in sales.
Rick Case, a Hyundai dealer in the U.S. since 1986 when the automaker first landed in the world's largest car market, said people don't want to be seen in luxury cars like the Mercedes, BMW and Lexus in these difficult times. Chairman Chung Mong-koo said if the company can overcome the current global crisis, it will get the chance to be a super car maker in the world. "The company should market cars tailor-made for car buyers in each country in which it operates in design and specifications with a unique, creative marketing strategy," he said during a stop at the company's research and development institute in Frankfurt, Germany, on Feb. 3.
The chairman said the current crisis is affecting all of the car makers, Hyundai Motor included.
Company officials said the chairman has been greatly encouraged the company's performance, especially in the U.S., and feels that the company can go a long way to beat its rivals in the world car market and become a top-rated global automaker, turning the current economic crisis into an opportunity and expanding its share of the global car market. Hyundai's market share jumped to 7.1 percent in January, the highest since the company first launched its car sales in the U.S. Also, a big factor in boosting Hyundai car sales was the Car Book 2009, a popular U.S. auto magazine, which named eight Hyundai and Kia cars including the Genesis, Verona, Mohave, Tucson, Lotze and Cerato on its buy recommendation list, joining a number of other auto publications carrying articles favoring Hyundai and Kia cars.
Under the marketing policy to sell specific car models depending on the preference by customers in a foreign country, both Hyundai and Kia have decided to market small- and mid-sized car models in Western European countries this year. Kia plans to market the Forte, a medium-sized sedan, and crossover CUV, the Soul, encouraged by the success of its C'eed model.
Hyundai introduced the i20 in Europe last year and the i20 small car model last month.
The sister automakers in Korea went further in securing the dealers for their cars in Europe by training new dealers to run Hyundai-Kia car dealerships, in addition to luring dealers of other cars to also carry their products.
Chung moved on to Moscow to check on the company's operation in the Russian capital, winding up his European trip in a car market that has been growing substantially ― the company sold 193,000 cars last year to rank first among imported cars in Russia, up 30 percent from the previous year. Kia sold 88,000 cars in Russia last year, up 13 percent YoY. nw

Chairman Chung Mong-koo of the Hyundai-Kia Automotive Group is on a visit to the group's subsidiary in Frankfurt, Germany, on a leg of his recent overseas tour.