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Hyundai looks for an image upgrade

Hyundai looks for an image upgrade

  Two years ago, auto giant Ford created quite a flutter in the US when it decided to give away Ford Fiestas to bloggers and tweeters for six months, asking them to record their experiences. This was not the first time an auto company had stormed the digital highways, but it got the auto world buzzing about the potential of new media. Now, Korean auto major Hyundai is following its peers across the world as it reaches out to social media influencers to promote the newly launched model of Elantra and reposition itself as a 'modern premium' car maker.

Y K Koo, managing director and CEO, Hyundai Motor India Ltd (HMIL), said, "We are happy with our position (in India) in terms of volumes. We are working hard to position Hyundai as a modern premium brand with the new offerings."

Koo sees a need to align Hyundai's India image with its global one where he believes the brand is positioned in between the mass market and premium brand. In India, the company is more popular in the compact segment, but has been trapped in a slow crawl in the mid to premium segments. The Elantra fits the modern-premium label and thereby provides a perfect vehicle to take the positioning forward.

The drive however promises to be a tough one. Elantra sells just a few 100 cars in a market that sells about 1,000 units a month and the category itself has seen a 33 per cent decline in volumes in recent months. Till July 2016, the company had sold total 22,413 Elantra units over four years.

Rakesh Srivastava, senior vice-president, marketing and sales, Hyundai, is not burdened by these numbers, however. He is optimistic that the new Elantra will mimic the brand's success in the global market, where it has sold around 11.5 million units in the last 26 years. And the company believes that its campaign strategy and sharpened focus on after-sales service will drive the brand forward.

Reaching out to online influencers
Last week, Hyundai flew in a group of auto bloggers into Chennai and asked them to test drive the new car on the city's scenic East Coast Road. Blogs and tweets under #Elantra tag is a part of the company's campaign, which is a mix of traditional and digital media.

Digital spends are up considerably this time around and constitute about 10-15 per cent of its total ad budget. This is in keeping with industry numbers that put digital spend at 15-17 per cent of marketing budgets currently.

Digital engagement strategies are catching on as they are low budget, campaigns stay in the public domain for a long time and can be powerful if the company partners with credible online influencers. Hyundai has tried to do that with the Elantra.

Puneet Anand, general manager marketing at Hyundai explains that Elantra's brand promise rests on four pillars: Performance, design, comfort and safety. These features will be communicated using 3-D formats to help customers get a complete feel of the new car.

"The challenge is penetration of the Internet and the devices, so traditional media will continue to dominate, but the growth of digital will be higher as penetration is low," says Anand.

Anand says the digital medium scores because it is easier to track the impact of influencers on car sales. "We don't know who the influencer is, in print media, but in digital we can keep track of who influences the customer and how much," he adds. Anand is reluctant to talk about conversion ratios (the rate that indicates how successful a digital campaign has been in garnering click-through and sales) but adds that his customer relation management (CRM) initiative, largely online, has seen a sharp rise in the number of people engaging with the company.

Riding the aspirational platform
The Elantra is being pitched as a car that is seen as a mark of prestige - this is the logic behind the choice of Rajasthan's palaces as a locations for the television ads that do not talk about product features at all. The positioning is further driven home by Shah Rukh Khan, who is the company's brand ambassador.

Elantra competes with Toyota Corolla, Skoda Octavia and Chevrolet Cruze. It has been priced aggressively - cheaper by about Rs 75,000 than the Corolla and its variants. "We are targeting market leadership with 30-35 per cent market share in the Elantra segment," says Koo.

Customers in this segment are not driven by price alone. Srivastava says that they look for reliability and assurance and it is to address these concerns that the company has introduced a premium service programme that offers a number of special benefits. Also he says Elantra could buck the segment slowdown just as Creta, its SUV has managed to do.

Creta was launched when the market had begun to slow down, but in the last seven months Creta grew over 40 per cent. Its share of the segment has more than doubled from 5 to 13 per cent, Srivastava said. The new Elantra he says has been configured to cater to customers looking for a premium experience and as long as the campaign manages to convey that, the company is keeping a confident hand at the wheel.