The latest name doing rounds in the battered US car market is Hyundai-Kia.
At present, Hyundai-Kia stands at the fourth largest car maker in the world. Hyundai secured this prestigious position by edging out the legendary Ford Motor Company to take the fifth place.
The South Korean car company was able to secure its place in the US car market despite having strong opponents. In fact, the company has separate operations for its Hyundai and Kia brands in the US and is the only one to report sales growth this year.
US car sales for General Motors, Ford Motor and Chrysler Group, as well as Japan's Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY) are all down between 25 per cent to 50 per cent from a year ago. But the combined U.S. sales for the Hyundai and Kia brands are up 2.6 per cent.
Consequently, the two brands have picked up 2.2 percentage points of market share during the first nine months of 2009. Hyundai and Kia now combine for 7.4 per cent of the US car market. This puts Hyundai Motor Group just ahead of Nissan as the sixth-largest car maker in terms of US car sales. Moreover, the Korean car maker is rapidly closing in on Chrysler, which now has just a 9.2% share of the U.S. market.
The big question is, “How could Hyundai compete with the Detroit's Big Three and the Japanese auto giants?” The obvious answer is, “Right cars at the right time.”
Sky high fuel prices kept pickup and SUV lovers at bay and people started opting for more fuel efficient cars and fuel efficient. Not to mention that fuel efficient cars are Hyundai's specialty. The trend for Hyundai cars accelerated because of the popular Cash for Clunkers program. Moreover, cars from Hyundai-Kia stable cost less than similar models from rivals. Fuel- efficient lower-priced cars evidently appealed to buyers.
Hyundai-Kia's US sales leapt 30 per cent over the course of July and August compared to last year’s. The rest of the industry suffered a 7 per cent decline in sales over those two months -- despite a boost from Cash for Clunkers.
Besides, Hyundai also made some savvy moves to take advantage of the trends moving the market in its direction.
Hyundai believes that increase in production and more advertising means higher sales.
In January, the company rolled out its Hyundai Assurance program, which allowed buyers who lost their jobs to return their cars without penalty. A month later, Hyundai added a new wrinkle to the program. The company agreed to cover three months of payments for buyers that were looking for work. The program helped drive up awareness of the Hyundai brand.
Hyundai also did a better job than most of its rivals of preparing for demand from Cash for Clunkers. The company guaranteed its dealers they would get the up to $4,500 payments per car sold under Cash for Clunkers directly from Hyundai, rather than having them wait for reimbursement from the government. That turned out to be a smart move.
Hyundai has also been taking advantage of the troubles facing General Motors and Chrysler. The company has grabbed dozens of US dealerships or facilities cut loose by GM and Chrysler as part of their bankruptcies.
Hyundai has stepped up its marketing efforts as well -- and at a time when many competitors were pulling back on how much they spend on promotions.
The company advertised during the Super Bowl for the first time ever in 2008 and did so again this year. The company also had a commercial during this year's Academy Awards.
What's next?
Hyundai-Kia have a solid group of new cars ready to hit the market in the next few years, such as the redesigned versions of Hyundai's Santa Fe crossover and Sonata sedan and Kia's new Soul and Forte small cars.
Industry experts said that Hyundai has primarily been a beneficiary of the economic downturn.
At present, Hyundai-Kia stands at the fourth largest car maker in the world. Hyundai secured this prestigious position by edging out the legendary Ford Motor Company to take the fifth place.
The South Korean car company was able to secure its place in the US car market despite having strong opponents. In fact, the company has separate operations for its Hyundai and Kia brands in the US and is the only one to report sales growth this year.
US car sales for General Motors, Ford Motor and Chrysler Group, as well as Japan's Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY) are all down between 25 per cent to 50 per cent from a year ago. But the combined U.S. sales for the Hyundai and Kia brands are up 2.6 per cent.
Consequently, the two brands have picked up 2.2 percentage points of market share during the first nine months of 2009. Hyundai and Kia now combine for 7.4 per cent of the US car market. This puts Hyundai Motor Group just ahead of Nissan as the sixth-largest car maker in terms of US car sales. Moreover, the Korean car maker is rapidly closing in on Chrysler, which now has just a 9.2% share of the U.S. market.
The big question is, “How could Hyundai compete with the Detroit's Big Three and the Japanese auto giants?” The obvious answer is, “Right cars at the right time.”
Sky high fuel prices kept pickup and SUV lovers at bay and people started opting for more fuel efficient cars and fuel efficient. Not to mention that fuel efficient cars are Hyundai's specialty. The trend for Hyundai cars accelerated because of the popular Cash for Clunkers program. Moreover, cars from Hyundai-Kia stable cost less than similar models from rivals. Fuel- efficient lower-priced cars evidently appealed to buyers.
Hyundai-Kia's US sales leapt 30 per cent over the course of July and August compared to last year’s. The rest of the industry suffered a 7 per cent decline in sales over those two months -- despite a boost from Cash for Clunkers.
Besides, Hyundai also made some savvy moves to take advantage of the trends moving the market in its direction.
Hyundai believes that increase in production and more advertising means higher sales.
In January, the company rolled out its Hyundai Assurance program, which allowed buyers who lost their jobs to return their cars without penalty. A month later, Hyundai added a new wrinkle to the program. The company agreed to cover three months of payments for buyers that were looking for work. The program helped drive up awareness of the Hyundai brand.
Hyundai also did a better job than most of its rivals of preparing for demand from Cash for Clunkers. The company guaranteed its dealers they would get the up to $4,500 payments per car sold under Cash for Clunkers directly from Hyundai, rather than having them wait for reimbursement from the government. That turned out to be a smart move.
Hyundai has also been taking advantage of the troubles facing General Motors and Chrysler. The company has grabbed dozens of US dealerships or facilities cut loose by GM and Chrysler as part of their bankruptcies.
Hyundai has stepped up its marketing efforts as well -- and at a time when many competitors were pulling back on how much they spend on promotions.
The company advertised during the Super Bowl for the first time ever in 2008 and did so again this year. The company also had a commercial during this year's Academy Awards.
What's next?
Hyundai-Kia have a solid group of new cars ready to hit the market in the next few years, such as the redesigned versions of Hyundai's Santa Fe crossover and Sonata sedan and Kia's new Soul and Forte small cars.
Industry experts said that Hyundai has primarily been a beneficiary of the economic downturn.
Labels: Hyundai-Car, US-Car-Market
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