Monday, June 29, 2009

Hyundai a Rising Star in Auto Industry

Sheds longtime second-rate brand status

South Korea's Hyundai Motor Co. has finally shed its former reputation as a second-rate brand to become one of the world's premier auto manufacturers.

"There are a lot of people who are convinced that Hyundai simply [couldn't] build a decent car," the auto Web site wrote in a recent review of the 2009 Hyundai Genesis. "Not that I blame them; twenty years ago Hyundai was peddling the Excel, a car that cost $45 to build," and was made out of materials of questionable quality.

But in a total turnaround, car experts today suggest that with Hyundai, people are getting BMW or Mercedes-Benz quality in a package that often costs tens of thousands of dollars less. Especially in today's market, reputation for quality and value goes a long way for cash-strapped consumers.

Lapping up Awards

Hyundai has won numerous industry accolades in recent months, underscoring its rapidly ascending brand appeal and reputation.

It began with Jan. 11, when the Hyundai Genesis was named 2009 North American Car of the Year at the 2009 North American International Auto Show in Detroit. The Genesis came in number one on the judges' rating scale with 189 points, followed by Ford Flex with 180, and the Volkswagen Jetta TDI with 131 points.

A panel of 50 automotive reporters from the United States and Canada selected the award based on a number of factors including innovation, safety, design, and driver satisfaction.

Hyundai was also named in the 2009 list of "Top 10 Tax Refund Cars" by Kelley Blue Book's Web site

"It's an honor to be recognized alongside luxury brands such as Porsche, Audi, Lexus, and Infiniti by a trusted automotive resource like," Derek Joyce, manager at Hyundai Motor America, said in a statement.

The awards continued into May, when Hyundai cars were awarded the 2009 Rising Star honors as it jumped 11 spots over their 2008 finish. The Hyundai Genesis won the Aspirational Luxury Car award and the Hyundai Sonata was presented with the Premium Mid-Size Car award by AutoPacific, an automotive consulting firm, in its "2009 Vehicle Satisfaction Award" series.

The Rising Star award is given to automakers that incorporate the most improvements in areas customers look for in a car. The cars were judged in 48 different categories to assess car owners' satisfaction.

"These are difficult times, with news of automaker bankruptcies, companies restructuring, and dealer closures a daily occurrence," George Peterson, president of AutoPacific, said in a statement.

"Clearly, the dynamics surrounding the Vehicle Satisfaction Award in 2009 are far different from anything we've seen in many years. Winners needed to overachieve to earn their awards."

During the same month, Hyundai's Entourage minivan was listed among the three "Best Family Cars for 2009" by Parents Magazine and The Entourage costs less and offers more features than all of its competitors, Parents Magazine said on its Web site.

Breeding Success

Despite a depressed market, Hyundai increased its 2009 sales by 2.07 percent over the prior year.

"Hyundai's success is the result of a cohesive strategy clearly designed to differentiate the firm from its competitors, combined with a willingness to make substantial investments to carry out the plan," Lawrence G. Hrebiniak, professor at the University of Pennsylvania, said in a Knowledge @ Wharton (KW) report.

While some global automakers are teetering on the brink of bankruptcy, Hyundai took bold moves to change negative perception with innovative programs that appealed to customers.

"South Korea's Hyundai Motors appears to be gaining on the pack with bold marketing and broad-based initiatives to improve quality," the KW report said.

Hyundai bought Kia Motors, another South Korean competitor, and escaped the Asian financial crisis of the 1990s relatively unscathed. "Hyundai emerged from the crisis with new strength to address its problems," the report suggested.

To boost sales, Hyundai gave its customers a 10-year, 100,000 mile warranty, compared to the typical 3-year, 30,000 mile warranty offered by its competitors.

"It was risky, but a powerful impetus to improve quality," John Paul MacDuffie, another University of Pennsylvania professor, said in the report. "They pulled it off and it helped them make a major jump forward."

Last year, Hyundai promised to repurchase cars from buyers under a financing or lease agreement, if the buyer were laid off from his or her job. This gave new impetus to those would-be buyers who were hesitant to purchase a new car.

"When you try harder, sooner or later, you get noticed," said Professor John Zhang in the KW report. "Hyundai will soon, if not already, become a force to be reckoned with for the U.S. and Japanese manufacturers because it gives the most bang for customers' money."

By Heide B. Malhotra
The Epoch Times

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