Magazine article Marketing


Magazine article Marketing


Article excerpt

Sales of the marque have slumped since the highs of the scrappage incentive, writes Alex Brownsell.

In the UK, Korean cars have never enjoyed the same level of affection as their Japanese counterparts. To own a Honda or Toyota is to be progressive and cutting-edge; to own a Kia, until recently at least, is to hide it in the garage.

That all changed when the government launched its scrappage incentive scheme in 2009, offering consumers a pounds 2000 grant in exchange for vehicles more than nine years old. While some manufacturers were sceptical, Korean sister brands Hyundai and Kia pounced on the deal with a blizzard of marketing activity.

Remarkably, Hyundai ended up selling more cars through the scrappage scheme than any other marque - an impressive 46,000 - beating even Ford into second place. It temporarily gave Hyundai close to 5% share of the UK market. However, since the end of the scheme, Hyundai has struggled to maintain the momentum of sales and its UK share has fallen to pre-scrappage levels of just over 3%.

Under new global head of marketing Won-hong Cho, the car manufacturer is to unveil a 'modern premium' brand positioning with an imminent ad push, but it remains questionable whether British drivers will respond positively.

Is Hyundai forever destined to be a second-class citizen compared with its Japanese rivals, or can Korean cars become genuinely desirable to UK consumers? We asked Mike Welsh, chief executive of Publicis Dialog, which works on Renault, and Kitcatt Nohr Digitas senior planner Phil Cragg, who works on the Lexus and Toyota accounts.


Two experts on how Hyundai can steer toward post-scrappage success

- Mike Welsh chief executive, Publicis Dialog

The Korean car marques did well during the recession. They had always been affordable, and the scrappage scheme made them even more so However, I'm not really surprised that Hyundai's sales have fallen back in the UK.

Scrappage is no more and the government introduced a VAT hike at the start of the year. That said, we're only just over two months into 2011 and we will have a much better idea of how Hyundai's year is going once we have seen March's new-registration data.

It is interesting to look at how Skoda has performed so far in 2011. The marque is up more than 7% year on year, and I think that has vindicated the marque's decision to grow its business by investing in the brand - not just through Fallon's ads, but at every touchpoint in the sales process. The work is very creative, very consistent and very effective.

If Hyundai decides to go down the same track - which it appears to be doing under new marketing chief Won-hong Cho, who is promising delivery of a new 'modern premium' positioning - then the brand has to accept that it is in it for the long term. …

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