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The rebranding of Hyundai

By raccars Published

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In the past decade, Hyundai's sales have more or less doubled. Its factories are flat out and global sales figures hovered around the five million mark last year. By any standards, Hyundai is doing well. However senior executives are concerned about Hyundai's brand image.

The Hyundai success story

Hyundai is a relative newcomer on the automotive scene. The first Hyundai was the Pony in 1975, although the firm had been manufacturing Ford Cortinas under licence since 1968. The brand didn't commence sales in the important US market until the mid-Eighties and didn't manage to put one of its own engines into a car until 1997.

However, despite its relatively gentle start, Hyundai has since become the fourth largest car manufacturer in the world and runs the largest automotive factory on the planet, located in Ulsan in South Korea and producing almost 1.8 million vehicles last year. It employs about 10,000 engineers and runs ten research and development centres world-wide.

And yet the Hyundai name fails to inspire the sort of brand loyalty and admiration experienced by other brands. Europe and the UK in particular have failed to grasp Hyundai's corporate strategy and sees it as competent but mid-range. In contrast, the brand positions itself at the premium end of the market, complemented by Kia as its value proposition.

This two tier strategy recognises the current industry trend which is leaving mainstream manufacturers in something of a dilemma, forced to increase standards to achieve premium status or accept budget brand status with inevitably lower margins. Any indecisive manufacturers are likely to be left behind.

Genesis

So Hyundai has decided to take action, starting by moving its plush new Genesis model determinedly up-scale. While this model already has a fairly high profile elsewhere, Hyundai is now planning to use it to convince the European market of its upmarket ambitions and has created a new Prestige Design Division to do so. With former Lamborghini and Bentley personnel in charge, the Genesis team is certainly well prepared for this task. The result could be serious competition for the Mercedes-Benz S-Class if badge snobbery were to be overcome.

Ioniq

A second prong of attack sees the development of an eco-vehicle sub-brand based around Hyundai's Ioniq model, which is to be made available in electric, hybrid and plug-in hybrid variants. The Ioniq is the first mainstream hybrid model from Hyundai, which hopes to produce a whole family of 22 eco vehicles within the next few years, including hydrogen fuel cell models.

Hyundai has learned from Toyota's experience with the Prius and is working hard on keeping development costs under control to ensure that the Ioniq remains financially competitive with modern diesel powered cars. In engineering terms the Ioniq is beautifully simple compared with other hybrids on the market. It also drives more like a traditional car than many other hybrids and has received praise for its on-road manners in urban environments in particular.

N Division

The third key element of Hyundai's approach is the development of the 'N' division, building genuinely high performance variants of Hyundai's standard range, polished by its endeavours on the World Rally Championship circuit. Former BMW M Division chief of engineering Albert Biermann is in charge here. Output is due to start in 2017 with a hot i30 hatchback, followed by a souped up Genesis, with either the Veloster or the i20 Coupe third in line.

It's a well thought out plan and Hyundai certainly has the mechanical and marketing prowess and the financial clout to pull it off. What's significant is the barometric view of an industry in which such a successful company feels that it has to take these steps to remain relevant and prosperous. It seems that merely building very good cars is no longer sufficient.

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