Hyundai the world’s No. 4 that could become No. 3
Korean carmaker innovates, expands, consolidates with finesse
By Kim Da-ye
The growth of Hyundai Motor has been spectacular.
Hyundai Motor Group including Kia Motors became the world’s fourth largest automaker by volume last year after Toyota Motor, General Motors and Volkswagen Group. It might even climb to No. 3 because of continuing weak performances by Toyota.
While aggressively expanding its presence in emerging markets such as China and Brazil, Hyundai Motor decided to take a step that is probably more significant than growing in size.
Hyundai wants to shake off the image of a manufacturer of affordable vehicles with only average designs and quality, so a new slogan, “New Thinking. New Possibilities” was announced in January at the North American International Auto Show in Detroit, Mich.
“A key strategy in sustainable growth is an outstanding ability to manage the brand. Hyundai-Kia wants to take its brand value to the level of the advanced automakers and to elevate its brand power to the highest global standard,” Chairman Chung Mong-koo was quoted as saying to the company.
“Now is the time to transform our image. With new ways of thinking, we will create new possibilities to prepare for the next 25 years.”
‘Modern Premium’
The core message is New Thinking, New Possibilities. “Modern Premium” which reflects Hyundai’s goal to upgrade design, quality, and services to the standard of luxury vehicle makers.
The Veloster coupe is the first vehicle developed under the new theme as well as the first in Hyundai’s “Premium Youth Lab” lineup.
The Veloster has one door on the driver’s side, two on the passenger side and a beetle-like back. The unconventional design is a rarity even among imported vehicles, and through it, Hyundai wanted to prove that the company takes innovation seriously.
This was followed by the launch of the Genesis Prada, a special edition of the Genesis large sedan developed in collaboration with the Italian luxury brand.
Development took two years and Hyundai made just 1,200 to maximize the car’s exclusivity.
Apart from vehicles under the Modern Premium theme, all Hyundai models have begun introducing features that are not available in their counterparts.
The Accent, a medium-sized car priced between 13 million and 15.4 million won, comes with a standard six airbags including those by the side windows, a rear-warning system and auxiliary and USB ports.
In terms of design, most vehicles in Hyundai’s fleet now have a “fluidic sculpture” look, unique to Hyundai that distinguishes them from other vehicles.
The “family look” was an innovative idea to create unity within the fleet and raise brand awareness. Korean cars had lacked unity in design, which is common among foreign automobile firms such as BMW and Audi.
The fluidic sculpture design is best identified by the strong side character lines that extend from the fenders to the tail lamps, the long, slanted headlamps that resemble eagle eyes, the wraparound tail lamps and the wing-like, hexagonal grilles.
The automaker calls it the “design philosophy that injects sophistication and dynamic angles as well as elegant lines resembling a calligrapher’s orchid strokes into the shape of a vehicle.”
Marketing strategies evolved along with the evolution of the products.
Most importantly, to maintain that “premium” image, the company declared the implementation of fixed prices so that all dealerships charge the same for identical products and services.
On the creative side, the automaker hosted a 15-day launch event for the Veloster, which began with a two-day opening show.
Hyundai set up a special stage in front of Jamsil Olympic Stadium in eastern Seoul and invited 4,000 customers to musical performances by singers and DJs including DJ Arikama and British DJ Carl Cox.
For the Genesis Prada, the automaker created a private showroom which catered to one customer at a time. It also delivered vehicles in a specially designed trailer that carried just one car for the individual customer.
For overseas consumers, the company executed marketing activities that targeted younger consumers. It launched a challenge for the best one minute 20 second music video for Mason Bates’ Mothership Remix, and sponsored the YouTube Symphony Orchestra concert held at the Sydney Opera House in Australia.
Assuring the consumer of unlimited loyalty, Hyundai takes before-and-after sales services to the next level.
When potential buyers book a vehicle for a test drive, a “car master” is allocated to each customer. The car master will visit the customer in person with the vehicle and sit in the passenger seat during the test drive to present all the features of the car.
Browsing can even be a special experience as showrooms in certain areas have been upgraded to provide extra services including giving away free umbrellas.
The Daechi branch in southern Seoul recently started H-Art Gallery Season 3 which displays 12 pieces by photographer Kim Jung-man.
For after-sales services, Hyundai now delivers repaired vehicles to wherever customers wish.
Within the company
Innovation comes from inside the company and Hyundai Motor has been focusing on spreading the ``New Thinking New Possibilities’’ idea to its employees.
The company created five videos on the theme for internal communication purposes and broadcasts them every morning to inform employees of the company’s new business strategy.
All promotional materials including schedulers for employees now have the theme printed or engraved on them.
It also hosted a presentation on the theme for all employees while inviting prominent speakers for special lectures.
The guest speakers included David Allen Aaker called the “father of branding,” and Lee Je-seok dubbed an advertising genius.
“Employees learned about the philosophy of innovation and about the ways of thinking to get creative ideas from daily life, which can eventually bring changes to Hyundai Motor,” the company said in a statement.
Perfect timing
The time for innovation is ripe as Hyundai has taken an advantageous position in the market by volume.
Hyundai Motor Group including Kia Motors sold 5.7 million vehicles worldwide last year, outperforming Ford Motor selling 5.2 million.
The sales volume rose 24 percent from 2009, and the growth rate was highest among the world’s top 10 automakers.
“Despite the sluggish recovery of the global economy in 2010, Hyundai Kia launched competitive new models and executed aggressive marketing activities,” the automaker said.
Hyundai Motor Group aims to sell 6.33 million vehicles globally this year, up 10 percent from 2010. Hyundai Motor’s sales target is 3.9 million, up eight percent from a year ago.
In the first half, Hyundai Motor sold 1.95 million vehicles, achieving precisely half of the target figure. The sales volume is 11 percent higher than last year’s, and domestic consumption rose by 7.3 percentage points because of the launch of the new Avante and Grandeur.
Sales growth has been more impressive abroad.
In the U.S., Hyundai and Kia together ushered in a new era with its market share surpassing 10 percent in May. Hyundai’s Sonata and Avante outsold Toyota’s Camry and Corolla and Honda Motor’s Accord and Civic for the first time, according to the Korean automaker.
In the first half, Hyundai and Kia sold 322,797 vehicles, their best six-month performance ever.
In Russia, Hyundai’s local model Solaris has been the most popular foreign brand vehicle and sold 10,833 in June alone.
The Russian plant began operations only in January has already reached full capacity, and Hyundai now plans to implement a three-shift system from mid August, increasing the 150,000-vehicles-a-year capacity to 200,000.