As Hyundai Motor America has surged to the top or near the top of ratings and sales rankings, the company has also been preparing a unique launch strategy for its Equus luxury sedan while simultaneously laying the groundwork for a January 2011 launch of a telematics system comparable to General Motor’s OnStar - a launch that is likely to take place in conjuction with the 2011 Consumer Electronics Show. Hyundai’s goal is nothing less than to become the most loved, most trusted and highest satisfaction mass market automotive brand.
That is the word from U.S. president John Krafcik, whose background includes tenures with Ford Motor Company and Toyota Motor Sales. Krafcik says digilence, frugality and harmony are the internal principals that have guided Hyundai Motors to a remarkably competitive stance in the market. He proceeded to share the roster of recent company achievements this week at the monthly Washington Automotive Press Association luncheon:
-> Projected 4.4% share of 2010 global unit vehicle sales
largest brand in the U.S. – expects to surpass Dodge for 6th
place by the end of 2010
largest OEM globally 2010
-> 4th in J.D. Power’s IQS (Initial Quality Survey) in 2009 behind Lexus, Porsche and Cadillac
in Consumer Reports reliability report card for 2010, up from #9 in 2009
-> Genesis: 2009 Car of the Year
-> Automotive Lease Guide residual values: Sonata tops Honda Accord, Tucson tops Toyota Rav4, Veracruz tops Toyota Highlander, Genesis tops Lexus GS350
-> #1 in EPA’s average fuel economy rating: 30.9 – 2008, 30.1 – 2009 (projected), 31.9 – 2010 (forecast)
-> Overall transaction prices up 11% relative to 2008 – now 97% of Toyota transaction prices
-> Sonata most shopped on Edmunds.com for past straight eight weeks
-> Hyundai included in the shopping lists of 28% of light vehicle purchase intenders – company survey
-> Sales up 51% year-to-date vs. 2009
Key elements to Hyundai’s strategy include rapid deployment of marketing programs such as Cash for Clunkers (deployed July 2 – ahead of the July 24th
completion of the policy announcement) and the assurance program for customers that might lose their job after their vehicle purchase. Perhaps most important was the company’s 10-year/100,000 mile warranty, which internal surveys showed to be the primary reason customers chose Hyundai. Hyundai also implemented free roadside assistance for five years, which surveys showed was the third highest reason for brand selection.
A strategic decision that reduced cost and weight on the company’s highest profile vehicle, the Sonata, helped the company achieve category leading fuel efficiency. Hyundai chose to offer the
Sonata with only four cylinders, including direct injected and turbo versions.
By offering only 4-cylinder engines on the Sonata, the company saved 50-100 lbs. in weight from not needing the hardware on board to support optional 6-cylinder engines. Hyundai was thereby able to achieve both category-leading 274 horsepower and 37 mpg fuel efficiency.
The next step for Hyundai is the launch of the Equus. The company is limiting distribution to a select group of exclusive Hyundai dealers (ie. that sell only Hyundai-brand vehicles) capable of supporting a program characterized by test drive requests fulfilled at the customer’s home or office, pick-up of vehicles for service calls with the drop off of a loaner at their home or office and the inclusion of an Apple iPad pre-loaded with the vehicle’s owner’s manual and a service scheduling application.
In fact, after a recent meeting with its dealer council, Krafcik says Hyundai is considering the possibility of offering Equus-like customer service across its fleet. He noted that the Equus is expected to arrive in September with extraordinary luxury appointments (ie. heated rear seats and refrigerator) yet priced between the mid-50’s and mid-60’s. Other calendar year 2011 introductions detailed by Krafcik include new versions of the Elantra, Accent and Santa Fe and a hybrid "sporty coupe" to compete with Honda's CRZ.
Of course, the icing on the cake for Hyundai will be the launch of its telematics service in January of 2011. Krafcik offered no details except to suggest that the company will opt for an embedded solution a la OnStar. Hyundai is no-doubt envious of the kind of customer loyalty a well-executed telematics strategy can deliver. Hyundai clearly thinks telematics will only get them closer to fostering the love and trust they are seeking.
The timing of the telematics launch suggests Hyundai will seek to make a Ford Sync/Microsoft-like splash at the Consumer Electronics Show in January. The 2011 CES is shaping up as a significant automotive technology launch pad as rumors of Apple- and Google-branded cars are swirling in the industry seven months in advance of the event.
- Tier 1 Vendor Regional Design Center Database – Kevin Mak – Automotive Electronics Service
- EV/HEV Technologies Supply & Fitment Database - Kevin Mak – Automotive Electronics Service