Hyundai brand is a burning issue

For an automotive brand, by any measure, three places ahead of Porsche would be considered a good position. That's how Hyundai has fared in a recent global brand value report (see more here) -- sitting at number 72 out of the world's 100 best known brands. Porsche sits at 75.

The report, prepared by brand consultancy 'Interbrand' and BusinessWeek, records in descending order, the brand value of 100 of the world's top companies, not necessarily just automotive companies. Hyundai's first appearance in this report was 2005, when the company slotted into place at 84th.

Although the global strength of the Hyundai brand appears to be growing from one year to the next, improving brand perception in Australia is a harder battle. Indeed, along with the UK, Australians (largely) continue to look down at Korean-built product.

Hyundai's new Sales and Marketing Director Kevin McCann is the exec on whose shoulders the responsibility to progress Hyundai's brand Down Under sits.

McCann admits Hyundai and Korean cars in general still have an image problem Down Under but doesn't necessarily believe a 'line-in-the-sand' campaign is the way forward for the brand.

The Carsales Network asked Mc Cann if it would take a dramatic campaign like Volvo "Bloody Volvo Driver" to kickstart the change at Hyundai.

"Certainly strong dramatic powerful messages like that can have an impact," Mc Cann opined. "However, what will be the real driving force in changing brand perception is product."

"The history of Hyundai in Australia is a little different to other markets. In the first few years here it was one of the most successful export markets for the company on the back of low cost durable cars. So there is a much higher presence of that sort of car in the Australian consumer psyche -- and as soon as it [the perception of low cost cars] becomes part of the consumer psyche it becomes hard to shift

"We benefited from that [perception] in those times but now it is some kind of millstone. I think this new product generation we're experiencing now will be a powerful enough force to break the psyche of the way people see the product and communication will be the finishing touch," he said.

According to McCann Hyundai's carefully tracked dealer sales closure rates are proof of this, as well as intention to purchase data. The sales and marketing chief says stats across the company's 143-dealer network show that around 68 per cent of showroom enquiries are converted into sales – a very high figure.

While early consumer surveys show around 4 per cent of new car buyers intend to buy a Hyundai, the company's share is running at about 5 per cent of the market. Mc Cann says this is the reverse of key imported brands which struggle to capture half of the intended purchasers.

McCann believes Holden's decision to source key models from GM Daewoo has helped market perception of Korean-built products. But also highlights the inequity of the Australian market's 'borderless' acceptance of Japanese brands' products which variously are sourced in Thailand, UK, Spain and other locations.

The steady value of the Won (the South Korean unit of currency) versus Aussie dollar since September 2005, against a falling Yen, allows Hyundai less room to move in the near-constant campaign pricing that dominates the light and small car markets. As well as a currency advantage, Japanese manufacturers continue to hold the upper hand in the measure of 'quality perception.'

It's little wonder he says the Australian new car marketplace is "the most cut throat in the world", adding: "My seven years in China [with Audi] was easily as cut throat."

For Hyundai to prosper Down Under it has to move away from the 'cheap and cheerful' end of the car market. The perception change is key to this move.

McCann says the company is realistic in the volume levels it can attain during this shift in brand positioning. He says Hyundai will reach 50,000 units this year – growth of around 5 per cent over 2006 which is well below the industry as a whole.

In the meantime he sees parallels between Hyundai's task Down Under with Skoda's resurgence in the United Kingdom. Ironically, as Hyundai moves its products higher in terms of price positioning, the Czech brand is returning to Australia later this year and is set to be one of its key competitors Down Under.

"There is no obvious overnight fix -- but we can see our way forward," says McCann.

To comment on this article click here