‘Modern, young, creative... A clear differentiator’

Nalin Kapoor, group head, marketing, Hyundai Motors India, talks to Raahil Chopra on perceptions of the brand in India, its portfolio, the challenges it faces and marketing tie-ups with ICC and FIFA

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‘Modern, young, creative... A clear differentiator’

In Hyundai’s experience, starting with the Santro, how has the Indian car buyer evolved from 1998 to now?

Nalin Kapoor (NK): Car buyers have evolved over this period; choice has led to this evolution. People are more aware of cars and are very serious in terms of what they want. The usage pattern has also changed dramatically. Ten years ago, a car was a very matter-of-fact purchase.
As a result of the change of lifestyle, cars are used more for pleasure now. The requirement of new features has come up. New segments have emerged, which for me is a major change in the industry. New brands have also emerged and entered the market. The customer is getting younger.

Value-for-money is still very important, but there a fundamental shift where people have graduated from only looking for value-for-money purchases to looking at styling, space, technology and features.

Is there still, among Indian buyers, the perception that Japanese cars are better (than Indian, Korean cars)? Was there one in 1998? Were there efforts along the way from Hyundai to change that perception?

NK: Our roots are Korean and we are a company from that land. But, if you look at how people judge us across the world, we are a global company. That is the great shift that has happened to Hyundai as a brand. We are now seen as a global powerhouse. We are now the number five global brand.

Hyundai has always been a very strong brand and the launch of the i10, i20, Verna and Elantra have made us look like a company more innovative compared to some others. We are also seen as a stylish company providing great technology. There has been a lot of momentum for the brand and all those characteristics are now strongly associated with the brand. So it’s a complete shift over the past many years.

Who is the primary consumer for each of your cars in the portfolio?

NK: The Eon is the car for first-timers. The tagline ‘India On’ clearly shows it is a car for the people of this country who want to experience an automobile for the first time. The key point is the styling and technology, which is still top-of-the-line, which means our customer doesn’t need to compromise.

We call the i10 the mid-compact car. It brings in an international feel. The i10s we sell in India are the same we sell across Europe and other countries. We export the car to Europe.

The i20 is for the person who has experienced compact cars but wants to graduate to bigger compact cars. Space constraints and other issues make them wary of moving to a sedan.
Verna is the upgrade. It’s an international class sedan with diesel and petrol options which offer more choices.

Above the Verna come the Elantra and Sonata. These cars are in some kind of a premium zone. People with multiple cars who want to experience something premium purchase these cars.
The Santa Fe is for someone who likes SUVs. People who like driving through various road conditions opt for this car.

The Santro and Accent continue to exist. They have been bestsellers over the past few years in their segment and continue to be a big part of our portfolio. They both still command value among consumers. The Accent is a strong hit with the corporate segment.
Our portfolio gives us an opportunity across all the segments.

Are there one too many car brands that are ‘me-toos’ in the small car market today? Is there enough differentiation? What is Hyundai’s differentiation, and what does the corporate brand stand for?

NK: The differentiation comes through space, styling, mileage and features. Thankfully for us, the Eon, i10, i20 and Santro are able to create the differentiation. Hyundai is now seen as a brand which is modern, young and innovative, which is a clear differentiator. Our service, after sales and dealership network help us create a good, positive positioning. Brand Hyundai stands for innovation, new thinking and new possibilities. Live Brilliant, one of our campaigns, explains it: If you are driving a Hyundai or own a Hyundai, you experience brilliant moments in life.

Hyundai is the global sponsor for the ICC and FIFA. It also sponsors tennis tournaments. What’s the rationale behind these associations and what’s been the response? What kind of ROI do these big properties provide?

NK: Hyundai is now climbing very quickly as a brand. Interbrand has us ranked 53rd in the latest ranking. Brand Hyundai has seen 24 per cent growth on the chart.

Sales volume and market share in critical markets like USA, Europe, India and China are increasing. I think our associations with such events has helped us gain.

Through our sports associations, we are trying to connect with consumers in a stronger and emotional way. It also links to our brand image of being passionate, innovative and aggressive. Football in many parts of the world provides that connect, and cricket in India provides us that opportunity.

Kia, our group company, also has sports associations – one of which is the Australian Open.

Hyundai is perceived to be second to Maruti for its after sales network. What efforts have been undertaken in this regard?

NK: In the last two to three years, we have made significant progress. We now have about 350 dealerships in 126 cities. We also have a network of more than 800 service points.

We will be expanding sales and service points both in semi urban and rural areas. We started an initiative through which we created more rural sales outlets, which helped Hyundai penetrate rural markets. Our customer surveys show that this initiative is being appreciated by consumers.

What are Hyundai’s challenges in the Indian market?

NK: The challenges we face are common to the industry. The economic growth of a country is sharply reflected in the growth of the automotive industry. Reports suggest that the growth of our economy could be as low as five per cent. This puts pressure on the numbers of the automotive industry. Two more challenges we face are the cost of fuel and the high interest rates. The fourth challenge the industry faces is the high manufacturing costs.

Which are Hyundai’s strongest markets globally?

NK: We are very strong in South Korea, USA, China and India.

What is your current sales volume in India and which car is the highest seller?

NK: The highest seller for us is the i10. We have a market share of 19.6 per cent in the passenger car segment in India. Till September, we sold a total of 4,78,902 units in 2012. 2,94,050 of these were sold in the domestic market, and 1.84,852 were exports.

What does Hyundai have in store for the festive season?

NK: The festive season provides us with a natural momentum in the market. We have a certain segment of customers who wait throughout the year to purchase a car during the festive season. What we have done in the past is that we try to communicate to the customer very clearly during the period. The customer is in a good mood during this time and that makes it a natural opportunity for us to communicate to them. So we do have a campaign lined up for this period.

What is Hyundai’s annual ad spend in India? How is this split across mediums? What is the role of each medium today in impacting a car-buyer’s decision?

NK: The major medium where we spend the most remains television. Almost 40 to 50 per cent of our budgets go towards this medium. A shade lesser than TV is print at about 30 per cent. Digital contributes to nine per cent. The balance goes towards on ground or some other activations. Digital, over the last 12 months, has become very important. Prior to this period we used to allocate about two to three per cent of spends to this medium.

It is a conscious effort that any campaign released by Hyundai should have a digital leg too. Whatever we do on ground, will also have a digital campaign. An example of this is our last campaign with the ICC. Whether we talk of the i20 facelift, or the Elantra launch, we look at digital for all these initiatives.

Shah Rukh Khan has been brand ambassador since Hyundai’s launch of the Santro in 1998. What’s the idea behind using him for the smaller cars (Santro and i10) and none of the other Hyundai cars?

NK: The i10 is our largest selling car. It is the most mass seller in our portfolio. We have used the appeal of Khan which helps us cut across geographies (urban, semi urban and rural).
For our bigger cars, we have no plans for a brand ambassador. About 75 to 80 per cent of the sales in India are of the hatchbacks and compact cars. We have traditionally been strong in that segment and continue to be strong there. Twelve months ago, we launched the Fluidic Verna; the car has been a runaway success. It is the segment leader since it has launched. So that makes us very successful in the mid-size category too. We recently launched the Elantra; there’s a huge traction and momentum. Sales figures show that this too is at top of its segment since its launch.
In the premium segment, we have the Sonata and the Santa Fe. The Santa Fe has done reasonably well for its price point and segment.

The Sonata is more of a brand driver for us. It helps us create visibility and makes people understand that Hyundai as a brand stands for innovation in the international market. It has all the technology and features a consumer can ask for. It is not a volume car and it has been launched with a certain objective of brand enhancement and we have achieved that. I would like to call it a success in terms of our objectives.