Discuses some of the challenges Hyundai Motor is likely to face in trying to reposition itself as a premium automobile brand, with its new premium model, the Genesis.As Hyundai Motor tries to reposition itself as a premium automobile brand, one of the biggest challenges the company faces is its perception problem; being perceived as a manufacturer of entry-level cars and lack of prestige amongst consumers. This is evidenced in the first quarter sales of the Accent (least expensive car) increasing by 74%, while the Sonata sedan (more expensive) was down by 30%. (Gidman 2007) Hence, Hyundai Motor has the challenge of trying to change (improve) consumer brand knowledge, and convince consumers that they are capable of producing premium cars with prestige, which still maintains the company’s trademark affordability and durability.
Although Hyundai Motor has come a long way since its days of being branded as the “Worst Car Ever Made”, the notion amongst consumers that the Hyundai brand is inferior to Japanese car manufacturers such as Toyota and Honda is still prevalent. Gidman (2007) mentions that according to a May 2007 Business Week article, 71% of people who viewed an unidentified car without any Hyundai logo on it said that they would buy it, if a Toyota logo was on the car they were 20% more likely to purchase the car. However, once the Hyundai logo was shown, those willing to drive it out of the showroom dropped to 52% (lack of prestige).
As with any product line or family that is extended, there is always a risk of cannibalization. One such example can be seen when the sales of the Tucson affected the sales of the Santa Fe: the Tucson’s similar size and more affordable (cheap) pricing was the reason for the drop in the sales of the Santa Fe. (Ward's Dealer Business 2005) In its attempt to create a more up-market image for the whole brand with its latest luxury offering – the Genesis, sales of its other models may be affected or vice versa (Eisenstein 2008)...Read more>>