Hyundai: Serious Player

Gary S. Vasilash

In case you missed reporting on this subject, let me quote the opening paragraph of a press release that came out earlier this week:

Hyundai Motor America today announced December sales of 33,797, up more than 40 percent versus December 2008. For the full year, Hyundai reported 435,064 sales, up eight percent over the prior year total.

Up more than 40% compared with last December?

Up 8% compared to the previous year?

Didn’t anyone tell the guys at Hyundai that the market stinks?

2011 Hyundai Sonata The 2011 Hyundai Sonata.  (This is not a typo.)

Hyundai is a challenger brand. And as such, it is going out to the market with some gusty initiatives. For the past several years it has been offering U.S. customers what it calls “America’s Best Warranty,” which is 10-year/100,000-miles on the powertrain, 5-year/60,000-miles bumper-to-bumper, 7-year/unlimited-mile anti-perforation, and 5-year/unlimited-mile roadside assistance. While that was undoubtedly predicated on quality issues that damaged the brand a long time ago, two points:

  1. It was a long time ago. Chances are those who remember either remember (a) indelibly and aren’t likely to buy a Hyundai or (b) vaguely and so it probably isn’t an issue.
  2. Hyundai is going above and beyond what is necessary, essentially, in the parlance of poker, going “all in,” because they are confident in their engines and transmissions, in the fundamental components of the cars and crossovers, in the steel that is used for their bodies.

Then there is “The Hyundai Advantage”: lose your job after you buy a Hyundai? Bring it back. If the warranty is going “all in,” this plan is borrowing money on your credit card. But these guys are confident that their hand is unbeatable. And so far it seems as though it very well may be a royal straight flush.

While this is different, in some ways it is reminiscent of how Saturn approached its customers, which was as humans, not as digits on a spreadsheet. And when it came to customer satisfaction, Saturn rose to the top of the charts. . .before the Detroit mentality took Spring Hill down to its level.

Hyundai, which is arguably turning out better cars than Saturn did, is now positioning itself to not only engage the customer, but to increase the overall number of its customers. While the rhetoric tends to be about taking share away from Toyota and Honda, chances are better than they’ll be taking it out of the dealerships of Chrysler, GM, and Ford.

These guys are clearly on a tear.