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In Focus
 
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HYUNDAI MOTOR CO.: ROAD TO NO.3
Can optimism change reality?
Becoming The #4 Globally in Terms of Sales Volumes is not an Easy Task. Not even for The Largest Korean Carmaker. But having Achieved that, how fast can it Grab The #3 Spot?
Issue Date - 23/06/2011
 
Aggressive marketing is another reason why Hyundai has managed to come out strong. And it was not a matter of working hard for a month. It toiled for years together. For instance, in early 2009, for the first time ever in the industry, Hyundai introduced an offer that allowed customers who get unemployed return their car, with zero penalty up to a year. In a nation where unemployment had skyrocketed in 2009, Hyundai made for an attractive proposition. Says New York-based Christian Breitsprecher, Auto-expert at San Oppenheim, to B&E, “Hyundai promised to take back your car if you lost your job. There were only a handful of people who returned their cars, but there were so many who started talking about the company in a good light. Trust and Hyundai became synonymous.”

Manufacturing was another area where Hyundai has excelled. Having established facilities in countries like India and China, the company was able to cater to most of the demand from 196 countries and 6000 dealerships across the globe. This selective geographical manufacturing strategy (which was unique to Hyundai amongst the top ten manufacturers of cars globally) gave the company a clear cost & price advantage.

So what more can Hyundai do? In India and China, the company is already the #2, and with consumers in these markets shifting to smaller cars, there is definitely more sales to be had in the years to come. As far as US & Brazil (the 2nd & 4th-largest markets resp. by 2015) are concerned, it could look at light trucks that still account for nearly 50% of auto sales in these markets. This way, Hyundai can grab more share. At present, the company has little or no offering in the crossover & minivan segment. It could also experiment with a new luxury product (at present, it is only the Hyundai Genesis which delights luxury car buyers). This could also bring Hyundai head-to-head with GM, Ford, VW & Toyota, all of whom have a complete lineup of cars sold under various luxury brands.

The road to the #3 global market share spot is not easy. For now, it’s a matter of concentrating on key markets and its top-selling hatchbacks, with calculated risks in the name of an experiment or two with light trucks and luxury vehicles. But a word of caution: in the race to capture more numberplates, Hyundai should not commit the mistake that GM & Ford made in the early 2000s – of trading profits for volumes.

 

Pawan Chabra           

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