Problem or solution?

The Grandeur badge has been applied to the flagship Hyundai in Australia for nearly 10 years. That's a relatively long time for a model name, but Grandeur remains perhaps the least known of Hyundai's current models.

The importer has had no option but to pitch the Grandeur straight into the highly competitive (and shrinking) VFACTS large car segment, where it has floundered -- up against stiff opposition from three (once four) very well regarded locally manufactured cars and relatively prestigious front-wheel drive imports such as Honda Accord and Nissan Maxima.

In May, Hyundai's large car sold just 10 units, 28 the month before that. With barely 0.2 per cent share of that market segment last year, is the Grandeur an unmitigated disaster for the importer? If so, why persist?

"What we would acknowledge is that we've not made a heavy investment in marketing Grandeur," says Oliver Mann, Hyundai's marketing chief.

Mann would rather the company accept responsibility for ineffectual marketing than admit that the Grandeur is near the ceiling buyers are willing to pay for a Hyundai. Or that the Grandeur doesn't command the sort of buyer loyalty its competitors manage.

To address that marketing shortfall, Hyundai will target the corporate sector for Grandeur sales, with perhaps as much as 50 per cent of the sales forecast going to the Grandeur CRDi.

"We successfully sell significant numbers of Santa Fe and the mix is biased towards the top Elite model, rather than the entry-level SX or the mid-range SLX," Mann says, citing the SUV as an example of a Hyundai product which is not subject to the same budget-price sensibilities that dog some of the brand’s smaller passenger cars.

Taking a leaf out of Toyota's book, Hyundai has to compete in a very large number of market segments (if not all of them) to be a dominant brand in Australia. For a long time, Hyundai has been hobbled by the $14,990 tag (more here) and the only way to change that is by fielding good product and dripping away at the stone of market perception through advertising and other marketing tactics.

Hyundai's introduction of the i30 to market, especially, has helped to change the brand's perception in some sectors of the market, but there's still some way to go for the small hatch.

"We know what an i30 is, but you just have to look at research statistics of what the general population… To what degree they're aware of i30 as a nameplate -- it's still very, very low in our portfolio," says Mann.

"And yet it's converting from awareness very strongly into intention to buy, which is a great sign. If we can continue to build awareness, we're very confident that sales will continue to grow.

"It's sometimes surprising how what [we] accept is well known, isn't actually well known at all," says Mann, acknowledging that the i30 doesn't generate the instant recognition in the broader community as model names such as Getz, Accent and Elantra.

One aspect of the i30 that sets it apart from the Elantra is its diesel engine -- an option that comes at a reasonable price. Hyundai has pounced on this as a unique selling proposition within the market and is in the process of extending diesel power to the Sonata midsize car and Grandeur (more here).

Will a diesel Grandeur therefore change the image of the large car? Can a diesel engine option transform the image of the big Hyundai to one of a car that is at once cost-effective, technologically competent and a quality alternative to other large cars? And given the mounting recognition of the i30 and the market positioning of the Grandeur, from where will Hyundai's change of brand image come? The i30 or the Grandeur...

"I don't know if we look at any one model in the range that's going to [shift brand image upmarket]," says Mann.

"I can tell you that we see the Grandeur as our flagship sedan," remarks Mann.

"Certainly it showcases the top end of Hyundai's technology core capabilities and the CRDi is another extension to that. It's worth saying that Grandeur is part of the changing face of Hyundai and we are conscious that perceptions of the Hyundai brand lag behind the reality of today's product.

"Our research -- and this is focus group research, so it's qualitative, not quantitative -- suggests that it's very commonly known that Hyundai is a dynamic brand, by which I mean it's perceived to be a brand on the move.

"Certainly, we have very high levels of awareness and always have done on the basis of extraordinary success in the 90s. And as I mentioned, for many people, the overriding image of Hyundai [is still one of a] cheap and cheerful brand. But nevertheless, there is now probably an even stronger perception that Hyundai is changing."

So Mann is telling us that Hyundai's image is changing, irrespective of what impact the Grandeur may or may not make with the diesel engine option. Speak to the Hyundai spokesman about the Euro/prestige association with diesel in the minds of consumers -- and the way that potentially distances Hyundai from many of the Japanese brand competitors -- and he draws an unusual parallel.

"Diesel is in some ways a little like the Hyundai brand, in that it's a little misunderstood. The enlightened know it's a great thing, that it delivers better performance, driveability, economy and environmental friendliness. There are also those people who think that diesel is slower, noisy and dirty -- but it is changing again.

"It's exciting for us that Hyundai is at the forefront of diesel technology, rather than trying to hop on to a bandwagon late in the day.

"That's been behind our thought with Sonata, where effectively, we've rationalised Sonata V6 out of the model line-up in order for CRDi to take its place."

To comment on this article click here