Saturday, July 4, 2009

Hyundai is the new Kid to beat on the block

by Ronald Jabal


Hyundai is no longer just a new kid on the block in the highly competitive global automotive industry. It has become the new kid to beat on the block.

Today, Hyundai is the world’s 5th largest automaker: a leapfrog from the 11th spot in 1999 and 6th place in 2006.

It has also gained nine percent on global brand value which is equivalent to a tag of US$4.8 billion pushing Hyundai to rank 8 in the list of most valuable automotive brands and distinguished Hyundai as the second fastest growing automotive brands in the world.

In the Philippines, Hyundai cars are the 4th leading best-seller – the only Korean brand in the top 5 rankings dominated mostly by Japanese brands.

Indeed, this is quite a feat considering seven years back, Hyundai in the Philippines, through the Starex vans, were merely a “backyard” operations – as vans were sold through the gray market – no showroom, no dealers, no after-sales service – where customer service was literally unheard of.

The gray market of the 1990s and turning of the tide in 2001

Hyundai is a fairly recent phenomenon in the Philippines. In the 1990s, Hyundai entered the local market through its Starex vans. The Starex, with its aerodynamic, European-inspired design characterized by its bullet nose, sleek exterior, stylish and roomy interior, captured the taste of car enthusiasts- especially families who were on the look-out for “get-away” cars – vehicles that they can drive everywhere and that can carry family members “in comfort and style”.

Starex became a brand of choice for vans. Then, Starex was more popular than Hyundai as people professed affection more to “Starex” than expressed affinity with the car manufacturer.

Unfortunately, the Starex vans in the 90s were introduced via the gray market – through importers who lacked quality control and after sales service. There were no dealers to go to when owners had some questions about the vans – there were simply nothing to turn to post-purchase of the vehicles.

This sorry state was not for long.

In 2001, Hyundai Asia Resources Inc. (HARI) was born and became the official Philippine distributor of Hyundai in the Philippines.

Ms. Ma. Fe Agudo, EVP & COO of HARI said they saw a huge opportunity to further grow Hyundai as a brand in the country and was not deterred by the presence of the gray market. The loyalty created by the Starex vans in 90s was made as a jump off point to introduce more car brands other than Starex.

“It’s the Hyundai Starex that really cemented Hyundai’s status as one of the leading automotive brands in the country, especially in the Passenger Van segment and we capitalized on this brand loyalty to further expand Hyundai’s presence in the Philippines… and since 2001 we have not looked back. ” Agudo says.

Reaping success

Three years following its birth in 2001, HARI already showed great promise as a competitive Hyundai distributor by posting steady growth from 2002 to 2004. As its actual sales gradually edged closer to its target sales, HARI gained the momentum to take its distributorship efforts to the next level, Agudo says.

With an aim to corner 5% market share by the end of 2005, HARI underwent a major transition in its fifth year, beefing up its operations with a more diverse product lineup, improved customer service, and stronger dealership presence.

Aggressively enough, HARI clinched its mission and attained 5% market share ending 2005, with a total of 4,924 units sold, which represents a 103% growth rate from its 2004 tally of 2,426 units. And from the 11th spot in 2003, Hyundai moved up to number 6 in overall rankings in 2005, making Hyundai the fastest growing automotive brand.

HARI’s drive never stopped since, posting achievement rates of 91% to a high of 118% from 2005 to 2008.

HARI’s yearly growth in industry sales following a phenomenal 2005 performance also kept its position as a challenger brand even stronger. Now, Hyundai joins the ranks of leading automotive brands as it currently holds the Top 4 position—the only Korean brand to ever be placed in the roster of Top 5 best-selling automotive brands, which is usually dominated by Japanese brands.


“We have many vehicles that have catapulted Hyundai to the success it enjoys today. These include the Tucson, positioned as the unforgivably affordable SUV; the Santa Fe, the SUV that sports both beauty and brawn, making it a favorite among SUV aficionados; the Accent, the phenomenal fuel-efficient diesel sedan; the i10 and Getz, small cars that are big shots when it comes to performance. Aside from our vehicle offerings, our introduction of Hyundai’s signature CRDi, or Common Rail Direct Injection diesel engine technology, remarkably established Hyundai as a formidable brand when it comes to fuel-efficient engine performance,” Agudo beams with pride.

Building brands through the years

The success of the Hyundai cars in the Philippines is rooted on a very clear message: it is a brand promise delivered. Agudo says HARI, using a very lean but highly creative in-house advertising, PR, events and marketing talents, have managed to come up with media plans and channel mixes that have targeted its expanding customer base.

“We have always been strategic in our placements. We know who are our existing and prospective clients and customers. We deeply know what motivates them to buy our cars; hence we are able to maximize our marketing budget through very tailor-fitted campaigns. Our message is clear and simple: Hyundai stands for refinement and confidence,” Agudo says.

The HARI official explained “refinement” can be found in the evolving designs of Hyundai vehicles: their sophistication reflects the lifestyle of Hyundai’s customers—progressive, fun, exciting, creative, and pace-setting.

She said “confidence” is about Hyundai’s commitment to excellence in product and service quality, the motorist’s safety and well-being, and its environment-friendly technologies.

What set HARI apart, as well, was its valiant effort to focus its campaigns on technology – offering superior quality by incorporating science and technology to the sassy look and feel of Hyundai’s current roster of vehicles.

Targeted at discerning, or even “unbelieving” motorists, the campaign for Hyundai’s CRDi, or Common Rail Direct Injection diesel engine technology, which was launched in 2004, was instrumental in highlighting Hyundai’s engineering integrity and its capability in building quality automobiles, Agudo discloses.

Hyundai’s introduction of its very own CRDi engine heralded the Korean automaker’s response to make cars more efficient by incorporating a diesel engine that combines qualities like exceptional power and fuel economy, lesser toxic emissions, and reduced NVH (noise, vibration, and harshness)—a far cry from diesel engines of the past.

“By standardizing our ad materials with our own CRDi logos and sustaining the mother campaign for the CRDi with press releases about our vehicle offerings powered with the said engine, production of product and corporate TV commercials, as well as other below-the-line activities, we have successfully captured the market’s attention toward Hyundai’s strides in technology with such constancy that now, customers themselves equate CRDi to Hyundai,” Agudo says.

She adds, “At the rate that we’re going, securing the Top 4 position and being the only Korean brand in the Top 5 rankings dominated mostly by Japanese brands, I believe that we’re on the right track"