Euro cachet for Hyundai

Hyundai is a company on a mission. It's well known in Australia that the South Korean car manufacturer is doing what it can to improve market perception of the brand, but it's not just the Aussie market where the company is haunted by a lacklustre image from the past.

While visiting the Frankfurt motor show (the IAA -- Internationale Automobil Ausstellung), the Carsales Network spoke with Oles Roman Gadacz, Hyundai's Director for the Global PR Team.

Gadacz sees the brand facing slightly different concerns in each international market. In Australia, the Hyundai brand is tarnished by its 'budget buy' reputation, cemented as long ago as the mid 1980s when the importer was established here by the Bond Motor Corporation. Build quality is almost a secondary consideration in this market. It's like Australian consumers expected the cars to fall apart, because they were so cheap to purchase in the first place.

The situation is a little different in North America, where build quality has been the primary issue and that has needed to be addressed.

In Europe, Hyundai models are deemed to be sub-standard in driving dynamics and design, when compared with the locals in those markets.

"The brand position does vary from region to region," says Gadacz, who candidly admits that the Hyundai name is actually better in markets where the brand has not been established as long.

"It's well known that we are relative newcomers to some markets. Consequently, [we] did not have much of a legacy reputation to overcome [in those markets].

Gadacz believes that, for markets such as the US, the worst excesses of build-related reputation are behind the company now.

"Problems came home to roost again and damaged our brand... And took a considerable time to dig ourselves out of that.

"In America, we had a different agenda. We had tremendous quality problems... We started escaping that by, of course, fixing the problems. We had a quality revolution that started in 1999, when our new chairman took over."

According to Gadacz, the company at that time began looking at quality issues as part of the vehicle's development, and not a separate process related to manufacturing and logistics. Suppliers, designers and engineers were called upon to mull over quality issues before a single prototype component was built.

"The results took a while to work their way through the system, but by 2003 we surpassed Toyota in the JD Power Initial Quality Survey...

"Dependability is starting to edge upwards and our resale values are starting to edge upwards..."

European markets present a different challenge for Hyundai, Gadacz believes.

"Europe is very dismissive of Asian products," he said.

"There's a stronger preference for European brands. European ideas about cars are very well defined; there's a very strong car culture here.

"So there's a double challenge for us, being Asian and being an outsider."

The manufacturer's response to Euro snobbery has been to tackle its rivals on their home ground.

"So we've had European designers working for us and now we're developing whole families of cars right here in Europe, for Europe. And on top of that, we're beginning to make cars in Europe," Gadacz explains.

"The ix35 is being built in Slovakia, by our sister company, Kia. These kinds of products have caused people to reconsider their perception of Hyundai, as being a legitimate player -- and not a pretender with inferior goods.

"You look at a car like the ix35 and it's a big step up for anyone -- certainly a big departure from the Tucson in styling, feel, look..."

It doesn't escape one's attention that the Hyundai stand in Frankfurt is full of design studies featuring hybrid-drive systems, battery-electric systems, LPG and relatively clean diesel powertrains. So Hyundai is plainly taking a technology lead for the future.

Gadacz confirms as much, but more than that he reckons that Hyundai is a leader in the here and now.

"Our chairman, who took over in 1999... wrote the powertrain people a blank cheque and said 'whatever it takes, make sure we have world-class powertrains'...

"[S V6 and R Series diesels] actually surpass some of our European competitors. I'm talking about Audi and I'm talking about BMW, in terms of specific power and output... We're very proud of these engines. They're quieter, they're good performers, but also clean..."

But for all Hyundai's improving reputation for build quality and dependability, product styling that's gaining ground, accessible technology and vehicle dynamics that have caught up with class-leading competitors -- the battle is not won yet, says Gadacz.

"This is something that most people still aren't willing to accept. There's a gap between perception and reality," he says.

Just days after the interview with Gadcz, Hyundai announced that a global brands survey by independent consultancy, Interbrand, had ranked the car company eighth in the world, ahead of Lexus, Nissan and Porsche. In the company's press release, the rear-wheel drive Genesis sedan and coupe models are credited with the brand's improving equity.

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