Hyundai to double EU ad spend in bid to banish image problem
SOUTH Korean carmaker Hyundai plans to double its advertising spending in Europe in a bid to build on market share gains at a time when struggling rivals are becoming more aggressive in cutting prices.
Ailing European brands like Opel and Peugeot may find it hard to believe, but Hyundai thinks it has an image problem.
Its own research shows that even more consumers would flock to buy popular models like the Hyundai i30 hatchback if only it were made by a different carmaker.
"It's not a luxury, it's an absolute necessity," said Hyundai Europe's marketing director Mark Hall. The company plans an increase in the advertising budget to an estimated €630m.
Hyundai has transformed itself from an SUV-focused manufacturer with perceived quality issues to one of the hottest-selling carmakers thanks to European-designed, -engineered and -built models like the i30.
Sales growth has averaged nearly 10pc in the past two years in a struggling European Union economy, lifting its share of the market to 3.4pc last year from 2.6pc in 2010.
However, Hyundai is currently at a point where many of its first-time buyers, lured by affordable prices, are poised to shop around again for a new car, and customer loyalty statistics show it would lose half of them today to rivals willing to undercut them with an even better offer.
To retain the marque's customers, and attract new ones, Rushforth and Hall realise they need to supply consumers with an emotional reason to buy as well as rational ones like value for money.
That is easier said than done, according to Bernd Buechner of Millward Brown, which has developed performance benchmarks to measure the effectiveness of ad campaigns.
"It's long been a problem of Hyundai that customers have been mainly attracted by the price, but simply doubling or even tripling your advertising spending alone won't necessarily solve the problem," Mr Buechner said. (Reuters)