Hyundai's steely resolve

Hyundai's steel plant has been recruited for a new brand-boosting campaign being rolled out around the world.

Named 'Modern Premium', the new brand strategy was first revealed at Detroit, back in January, but the company explained the concept in some detail to Aussie journalists in Korea last week — including the involvement of the company's steel plant and raw materials supplied from Australia.

While the new brand strategy principally hinges on Hyundai's rapidly improving product range around the world, it also aims to bolster the company's image as a corporate citizen through a multi-faceted approach; the company doing its bit for the environment and society in a broader sense.

Hyundai employs workers in production or R&D facilities all around the world, abiding by 'fair trade' principles, and it's committed to fuel cell vehicles for the future. But Hyundai's environmental focus isn't limited to building cars that go further, relying less on fossil fuels. The company is sourcing steel for its vehicle production from its own steel plant, located at Ulsan in South Korea.

More than 50 per cent of the coal used in producing the steel is supplied from Australia. Raw materials are housed in enormous domes (pictured) to ensure that wind won't scatter dust across the facility and pollute the ocean nearby. The facility at Ulsan is thus remarkably clean, by the standards of steel plants, despite its massive scale. By 2015 the plant is forecast to produce 12 million tonnes of steel annually. Energy to power the plant is derived from gaseous by-products of the steel production process. According to Hyundai, as much as 70 per cent of the plants power needs are met by this means.

The steel itself, no less than 6mm thick, is supplied in rolls to the car factories, where other environmental initiatives have been implemented — initiatives like the water-soluble paint at the Asan plant, where the i45 and the Grandeur are built.

In other words, it's no longer enough for Hyundai's products to be affordable, practical and economical to run, they must also foster pride of ownership. To use Ms Shin's expression, the car must be a "life partner" for the owner, and not just an appliance.

There's an element of hair-splitting in the concept however. Hyundai wants consumers to raise their expectations of the brand's products, but not too high.

"We are not going to be a luxury brand," Ms Shin explained.

The company intends for owners to appreciate the readily useful features built into the each car's specification.

Asked by the Carsales Network how 'Modern Premium' sets Hyundai apart from the similar brand-boosting programs of other companies, Director of the company's Global PR Team, Frank Ahrens, explained that "people are surprised by what they're seeing, so it's new for us."

It may come as a shock for many to hear that the rear-wheel drive Genesis was awarded North American Car of the Year in 2009, he explained; or that the Tau V8 powering the Genesis was voted by Wards AutoWorld one of the world's ten best engines in 2010. Favourable reviews for new models, allied with strong results in JD Power surveys (quality) and Interbrand reports (brand recognition) are also counterintuitive for those who think they know what Hyundai stands for.

"It's more features at an unexpected price level," Ahrens continued. "but... we want to be a lifetime partner; we want you to love our cars... and what that means is an emotional connection.

"More and more consumers care about how the products are made, where they come from, fair trade, things like that — and, for instance, I think Hyundai Steel is part of 'Modern Premium', because we can say: 'look, much of the steel for your car is made in as clean a way as is possible — at a plant that generates 70 per cent of its own electricity by [recovering] waste gases'.

"That's part of... what's baked into 'Modern Premium'; it's not just about offering the vehicle at a lower price with more stuff on it. It's about creating the right vehicle for the times..."

At that point, Ms Shin clarified that the name of the brand was not just 'modern' and 'premium', as two unrelated ideals.

"The whole 'Modern premium' [philosophy] is a new phenomenon for us — and also the customers. It talks about how we're going to provide them with emotional value and some connection with them," she said.

When it was put to her that the strategy already appeared to be practised by Hyundai's Australian arm (HMCA), she agreed and hinted that feedback from Aussie consumers had played an important part in the development of the new plan.

"Yes, of course. This has been created by the global strategy team... Australia has been a very important market for our team..."

Her colleague — and General Manager of the Brand Strategy Team — Yong Sung Cho, jumped in with further information that because Hyundai's image in Australia is somewhat different from other parts of the world, the company would customise the plan for the local market.

Subsequently we spoke with HMCA's Senior Manager PR and Events, Ben Hershman, concerning the new strategy — including a new tagline for advertising purposes: 'New thinking, new possibilities' — and how it would affect the local arm's sales and marketing efforts.

Hershman neatly encapsulated the concept — as it affects product planning — in the following way: "Our position in the past, in Australia, has been to bring affordable technology and make it available where possible, across our cars. That could be through a lifestyle feature... such as iPod connectivity, through to more of an under-the-skin safety feature, such as ESC."

Hershman traces this back to the launch of the i30 in Australia, when the company began "offering great value for money, combined with outstanding quality and outstanding safety."

As far as can be gauged, it seems like Hyundai in Australia is cherry-picking the appropriate features for its vehicle specifications. Remote central locking for a small hatch, for example, allowing the driver to lock or unlock the vehicle while carrying bags of groceries. Or iPod connectivity for diesel SUVs, because their touring range will take them well out of the reach of big-city radio stations. According to Hershman, a feature like a sunroof is often left out of the standard specification, because it doesn't sit in the right place on the graph of affordability versus popularity.

There's little new in this, per se. What makes 'Modern Premium' a little different from what car companies have practised in the past is the way it bundles social conscience issues (Ahrens' "fair trade") or environmental awareness as integral parts of the plan.

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