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Hyundai Australia in brand rebuild

Sales attack: HMAC chief executive Bong Gou Lee and the CCS concept. Indications from HMC management in Seoul are that it is close to launching a roadster to rival Mazda’s MX-5 and Toyota’s MR2.

Hyundai Australia embarks on an ambitious marketing campaign

12 May 2004

HYUNDAI Motor Co Australia (HMCA) has increased its marketing budget 67 per cent to $50 million in 2004 as it rebuilds the brand in Australia and strives to return to 60,000 annual sales before 2007.

Such a result has not been achieved since 1997, when the Excel small car was the third-biggest seller in Australia behind the Falcon and Commodore and accounted for close to two-thirds of the South Korean car-maker’s total volume.

Notwithstanding the downward trend since then, HMCA chief executive Bong Gou Lee has told GoAuto the marque would double its 2003 volume to achieve 60,000 in "two or three years" – without resorting to the feverish discounting it used the late-1990s, which tarnished its brand value and has restricted the success of better class vehicles ever since.

"We have a medium-term target of 60,000 in two or three years," Mr Lee said. "By 2010 we’ll have 80,000 or more."The 2004 sales goal is 40,000, which Mr Lee said would be reached with continued strong Getz and Accent small car sales, concerted marketing efforts behind the Sonata sedan and Terracan all-terrain wagon, relaunches of the Tiburon coupe and Santa Fe soft-roader and the introduction of the Tucson small 4WD.

"We have various areas to improve," Mr Lee said. "We have to improve our dealer network facilities, the capability of the sales team and also we need to give more confidence to our customers on the reality of what we have. We have to improve our customer satisfaction."Since Hyundai Motor Co took direct control of its Australian affairs from Cycle & Carriage (Hyundai Automotive Distributors Australia) in October 2003, Mr Lee and his management team have deleted the La Vita mini-MPV from the stable and withdrawn several other models until the retail network is better trained and increased marketing funds become available.

"Part of the problem we had when we released five or six products over 18 months was just purely the amount of money HADA had, or was prepared to invest in, positioning those products,” said HMCA director of sales and marketing Theo van Doore.

"If you look at the growth, post-Excel, in terms of just the number of products we introduced in the marketplace in a very, very short period of time, it was almost overwhelming. The cost of doing so for HADA at the time was quite astronomical, so it was almost too much too quick."Mr van Doore said HMCA had increased its marketing budget from $30 million in 2003 to $50 million this year and would concentrate its expenditure on higher-grade vehicles, most of which have struggled to win widespread acceptance in Australia.

"We accept that it’s going to take a little bit of time to pass the ‘barbecue test’ where there is a certain amount of pride with owning a new Hyundai," he said.

"We’ve got some scars and some wounds of years gone by, which we are now remedying, and we’re improving the way we advertise.

"It wouldn’t be unusual for the price point of some of our products to change four or five times in the one year. There was a certain amount of discontent amongst our buyers because of the inconsistency in our pricing."New model releases demonstrating Hyundai’s ongoing improvements in design, driving and manufacture will also be critical.

1 center imageFollowing the release of Tucson (left) in August, over a 12-month period HMCA will have all-new versions of the Sonata, Accent, Santa-Fe and Grandeur large sedan – all of which will serve as an important indicator on how far the brand has evolved.

"Australian consumers are saying to us that ‘something is happening to Hyundai (but) I’m not too sure what it is yet’," said Mr van Doore.

"There’s a lot more confidence than we’ve experienced for quite some time in the brand, so in 12 months’ time we’ll be in a much better position in terms of the perception of who we are and what we are.

"We’ll have volume products (but) it’s also important for people to understand the depth of the brand through the various products that we have available.

"Even now, even to this day, despite the money that we’ve spent and the research we’re doing and the communications, a lot of people still don’t know about all of what we have."HYUNDAI SALES IN AUSTRALIA

Will the worm turn again for the South Korean marque – this time, without the Excel?1996 48,871
1997 59,798
1998 57,219
1999 47,133
2000 45,331 (Excel discontinued June)
2001 40,056
2002 34,176
2003 30,921
2004 40,000 est.
2006/7 60,999 est.
2010 80,000 est.
Source (1996-2003): VFACTS

The road ahead for Hyundai

HYUNDAI Motor Co (HMC) will release a new vehicle each six months over the next three years, most of which will be heading Down Under. As this occurs, the Australian arm HMCA will also reintroduce some models it took from the market in 2003. Here’s what GoAuto understands is coming to Australia.

TUCSON

DUE in August, the smaller sibling to the Santa Fe soft-roader will be a crucial vehicle for the marque, starting below $30,000 and including a 2.7-litre V6 in the range. The base engine will be a 2.0-litre petrol, while a 2.0-litre turbo-diesel could arrive in 2005 if consumers take to the (2.9-litre) diesel slated for Terracan. A three-door version with removable soft/hard roof is also on the cards, based on the four-seater Neos-II concept shown in Tokyo last year.

SONATA

THE all-new NF Sonata arrives mid-2005 and will be a quantum leap over the current EF version. Sightings in South Korea last month show it will have a sleeker, sportier demeanour. It is larger than the current car and will be the first with the new ‘Theta’ series of inline four-cylinder engines. A 2.0-litre and 2.4-litre variant, both meeting the strict Californian Ultra Low Emissions Vehicle (ULEV) standards, are under consideration, along with an upgraded version of the current 2.7-litre ‘Delta’ V6.

SANTA FE

THE small-medium Santa Fe soft-roader has failed to strike a chord with Australians, something HMCA has to live with until a new generation model arrives in the first quarter of 2006. A facelifted version will be introduced in the fourth quarter of 2004, but the all-new Santa Fe is the one to watch. It will be bigger in all areas, include a third row of seats and take the vehicle into the medium segment to rival bona fide cross-overs such as Toyota’s Kluger. The wild exterior curves will be toned down while the engine should be the first in Australia with an all-new six-cylinder engine ranging from 3.3 to 3.9 litres. Odds are it will be a 3.8-litre V6.

TERRACAN

THE larger Santa Fe will eat into Terracan sales when it arrives in the first quarter of 2006, which could force HMCA to remove its harder-core all-terrain wagon from sale until an all-new version debuts late in 2006. This incarnation will be large enough to seat seven or eight people in comfort, and GoAuto sources indicate it will remain separate-chassis and become a direct rival to the all-conquering Toyota LandCruiser and Nissan Patrol. Before then, a 2.9-litre four-cylinder turbo-diesel will be added to the current range in the first quarter of 2005.

ACCENT

THE E-cubed concept car revealed in Geneva in March shows the basic design of the next generation Accent, which is due for release in the second half of 2005. It will be larger than the current version and, like Sonata, have at least one version of the new aluminium ‘Theta’ engine being built in at least 1.8, 2.0 and 2.4-litre sizes. GoAuto has confirmation that two turbocharged versions are in development – a 1.8 and 2.2 – and that a high-output natural-breathing 2.0-litre engine is also in the works. Sedan, hatch and wagon versions are all anticipated. HMCA’s Theo van Doore said: "We believe Sonata will be like the Mazda6 was to Mazda and the Accent will be to us like the Mazda3 was to Mazda".

ELANTRA

WHAT then will become of Elantra? The answer from HMC at the moment is that it, too, will increase in size and, like Sonata and Accent, take on more Euro-flavoured looks inside and out. There should be a strong visual link to its smaller and larger stablemates, while the message on the interior is that it, too, will have softer materials, more textiles and aluminium-look details than is the case with current cars. Its release date should be within six months of Accent, in the first half of 2006.

GRANDEUR

THE large car was marched out of showrooms in 2003 – not for lack of sales, HMCA would have us believe, but as one of several models which were removed to give dealers a reprieve. The recently facelifted Grandeur was not taken for Australia, but the car will make a return as an all-new model – with a 3.8-litre V6 – here late in 2005. "The new Grandeur will be released as part of growth of our business when the marketplace can take it," said HMCA’s Theo van Doore. "I’ve actually seen the car – and it’s stunning."

ROADSTER

WITH a convertible version of the Tiburon coupe on the backburner – the next generation, with steel-roofed cabriolet, is due in 2007 – indications from HMC management in Seoul are that it is close to launching a roadster to rival Mazda’s MX-5 and Toyota’s MR2. It will be based on the HCD6 mid-engined two-seater shown in Chicago in 2001, which was closer to production than the radical NEOS concept shown in Paris the previous year. Nothing has been seen since, but HMC designer and senior vice-president Young-Il Kim indicated to GoAuto last month that the roadster was still at the front of the stove. “You can have an expectation for this,” he said.

TRAJET

THE seven-seat people-mover will make a comeback to the Australian market in August with some additional inducements, but HMCA realises it will never be a volume seller for the marque or able to quell consumer thirst for its South Korean sister, Kia’s Carnival. HMCA’s Theo van Doore said: "We’ve done some research, there is some definite demand for the car, it’s not meant to be a high-volume product but is meant to show the depth of the brand." The new generation is due in 2006, based on the NF Sonata platform.

UTILITY

IT’S no secret that HMC is building its own ute to take to the US, having been unable to secure something from Dodge (based on Ram or Dakota) through its now tenuous links with DaimlerChrysler. It will not be a full-size pickup truck but closer in size and outlook to Ford’s F150. Production in right-hand drive is still to be confirmed for the vehicle, which is due for release in the US in 2006/7.

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