It all started with the ill-fated Excel.
When South Korean automaker Hyundai Motor Company started peddling its first front-wheel-drive model in the US in the mid-1980s, consumers were impressed by the affordable entry-level car, and Hyundai broke sales volume records during its first year selling in the US.
But the Excel didn’t exactly excel. The exhaust and fuel systems, defroster, and alternator were just a few of the components that were the focus of numerous recalls throughout the late ’80s and early ’90s. After that initial phenomenal sales surge, you could now hear crickets at Hyundai dealerships around the country. But perhaps even worse than the company’s plummeting sales was the severe ribbing that Hyundai’s reputation took. The Excel started making appearances on “Worst Car Ever Made” lists, and the company even became fodder for late-night TV jokes (David Letterman famously ripped on the beleaguered brand in one of his Top Ten countdowns). Simply put, Hyundai was faced with a PR nightmare.
At this point, the brand could have slunk back to Seoul, its tailgate between its quarter panels. But Hyundai decided to make lemonade out of its steel lemons, working feverishly behind the scenes to boost quality and once more gain consumer confidence. The company even added on an unprecedented 10-year/100,000-mile powertrain warranty—assurance to buyers that the car wouldn’t fall apart on the turnpike while speeding along in the passing lane.
Today the company boasts nine models, ranging from the entry-level Accent to the higher-end Veracruz. In between are the compact Elantra; the Santa Fe and Tucson SUVs; the mid-sized Sonata and Azera; the sporty Tiburon; and even a well-received minivan (the Entourage—which, oddly, you just don’t see on the roads competing with the Honda Odyssey and the Toyota Sienna, despite its excellent ratings).
And, thanks to its efforts, the brand has definitely made inroads over the last decade in both sales and in public perception. Hyundai was said to be the sixth largest automaker in the world by an Automotive News survey, and it was also ranked 72nd in the 2007 Best Global Brands survey by Interbrand and BusinessWeek. J.D. Power & Associates listed Hyundai as the number-one nonpremium automaker in new-vehicle quality (and only behind Porsche and Lexus overall, even surpassing the all-powerful Toyota brand in the number-four spot). In a September 2007 posting on the Consumer Reports car blog, Jeff Travers chose the Elantra as his top pick for a compact sedan.
Sounds like the Hyundai brand is headed back toward the on-ramp. But according to BusinessWeek, only 23 percent of all new-car buyers in 2006 considered buying a Hyundai, while 65 percent said they would pony up their pennies for a Toyota, 50 percent for a Honda. And that J.D. Power report that lavished praise upon Hyundai’s quality? The same company lumped Hyundai into the “worst reputation” group with Jeep, Land Rover, and Kia.
Hyundai clearly still has a perception problem to combat. Which makes its latest strategic move even more puzzling: moving into the premium market.
A Leap Into Luxury
For a car brand that has prided itself on affordable efficiency, it may seem odd that the company now has two models that approach the US$ 30K mark (the Azera and the Veracruz crossover), as well as the similarly priced new Genesis concept car that debuted at this year’s New York Auto Show. The Genesis, with upscale amenities and a price tag to go with it, is positioned to take on the Lexus ES350 and the BMW 5 Series, formidable competitors considering Hyundai’s history.
But perhaps schmoozing its way into the same crowd as Toyota’s luxury contender and the Beemer is just the type of jumpstart the Korean carmaker needs to change the mindset of the American car-buying populace. By disassociating itself from its former self-imploding-aluminum image and repositioning itself as a premium automobile brand that still offers the great bang-for-your-buck that Hyundai is known for, it finally has a chance to break out of its perceived mold of mediocrity.
Hyundai’s efforts in repurposing its brand is starting with a new print/broadcast/online ad campaign created by Goodby, Silverstein & Partners. Using the theme “Think About It,” the initiative appeals to consumer intelligence by providing transparency into design, reliability, and safety standards in the auto industry. Go to the website (www.think-about-it.com) and you’ll find statistics from the National Traffic Safety Administration (did you know that front-impact air bags reduce driver fatalities by 26 percent?), as well as interesting factoids from unknown sources (such as 12 percent of male drivers steer with their legs “often” or “sometimes,” or Aries drivers are more involved in auto accidents than drivers who fall under any other sign of the zodiac). In one of the early TV spots, viewers are asked, “Shouldn’t a car have more airbags than cupholders?”
That the Hyundai name is not included in the URL (nor in the first phase of the rest of the advertising campaign) is no accident. When Goodby did its initial research using the Veracruz SUV as the guinea pig, according to a May 2007 BusinessWeek article, 71 percent of the people who viewed the car without any Hyundai logo on it said they would buy it; once the logo was shown on it, those willing to drive out of the showroom dropped to 52 percent. Meanwhile, smack a Toyota logo on an unidentified car and consumers are 20 percent more likely to purchase the car.
The Hyundai logo (a slanted “H”) is said to represent two people shaking hands—the company and the customer. Hyundai hopes its revitalized, repositioned brand can result in many more deal-closing handshakes on the lot.
Source: Brandchannel, 10/22/07
