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Hyundai-Kia Looks to Become More European to Beat Fiat

Hyundai Motor Co. (005380) and sister brand Kia, already boosting sales in Europe’s contracting auto market, are extending their challenge to Fiat SpA (F) and PSA Peugeot Citroen (UG) by enlisting soccer stars to steal customers.

The Korean carmaker is attracting Europeans by stepping up sponsorship of their favorite pastime, hiring soccer heroes like Germany’s Lukas Podolski and France’s Karim Benzema to promote Hyundai as part of a marketing blitz focused around the European championship, the region’s biggest tournament. Kia Motors Corp. (000270) revamped the Cee’d compact, giving it sportier European styling to challenge Volkswagen AG (VOW)’s Golf.

“One of the issues we face as a brand in Europe is that we’re considered Asian and people don’t feel emotionally attached,” Mark Hall, head of marketing for Hyundai in Europe, said in an interview. “Anything that connects with the region’s passions helps close that gap.”

Hyundai and Kia are intensifying their targeting of European consumers to extend their expansion, which has been based on a mix of low prices, long warranties and inexpensive manufacturing. That combination has made the Korean manufacturer the only volume carmaker to grow in the region this year, at the expense of local brands, according to data from auto industry lobby ACEA.

The Seoul-based group’s sales rose 16 percent through May, compared with a 17 percent drop by Italy’s Fiat. Deliveries for French manufacturers Peugeot and Renault slumped 15 percent and 19 percent, respectively. General Motors Co. (GM) (GM)’s European sales, including the unprofitable Opel brand, declined 11 percent, while Ford Motor Co. (F) (F) fell 8.2 percent. Sales at Volkswagen, the region’s biggest carmaker, slipped 1.9 percent.

Lower Costs

“They’re benefiting from lower costs, and their cars have clearly improved in quality and technology,” said Tim Schuldt, a Frankfurt-based analyst at Equinet. “The French, Opel and Ford are challenged by them the most. Now Kia and Hyundai must manage their growth, which has been a problem for many companies that expand fast.”

Hyundai plans to increase European sales by about 25 percent to 500,000 cars by 2013, boosted by the ix35 crossover and i30 hatchback. To underpin its goal of lifting its European market share to 5 percent from a target of 3.5 percent this year, the brand will double capacity at a factory in Turkey to 200,000 vehicles, investing 475 million euros ($598 million) to add the i10 subcompact there by the end of next year.

Kia intends to lift its share of the European market to 3 percent next year from 2.5 percent now. The carmaker added a third shift and about 1,000 workers in the first quarter to its plant in Slovakia.

The expansion contrasts with GM’s plans to close an Opel factory in Germany after Fiat shut an Italian plant at the end of last year. Overcapacity in Europe is projected to more than double to about 2 million vehicles in 2012, with demand forecast to drop for the fifth consecutive year.

European Design

Kia is basing much of its growth on the revamped Cee’d, which is narrower, lower and 5 centimeters (2 inches) longer than its predecessor, to lure customers away from models like the Opel Astra, Renault Megane and Peugeot 308, according to Paul Philpott, Kia Europe’s chief operating officer. The model starts at 13,990 euros, 18 percent less than the VW Golf.

“It’s a car designed for Europe, built for Europe, by Europeans,” Philpott said in an interview. “It’s got a very European feel to it.”

Early signs have been promising. When the Svenska Bil car dealership in Stockholm presented the model a month ago, customers were lining up for a test drive.

“Kia is where the Japanese were in the 1990s,” said Hakan Pohl, head of the dealership that sells Citroen, Mitsubishi, Nissan, Opel and Chevrolet vehicles. “They have a successful road ahead of them.”

Hyundai is looking for broad exposure with the European soccer championship, which ends with the final in Kiev on July 1. In addition to television and stadium ads, activities at the tournament, which was viewed by more than 4.8 billion people when it was last played in 2008, include public viewing venues in Paris, Madrid, Moscow and Prague.

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2013 Hyundai Elantra Coupe, GT: 40MPG Highway, Less Than $20k

Earlier this year at the Chicago Auto Show, Hyundai announced the expansion of its highly-popular Elantra line by announcing two new models for 2013.

Now we know that both cars -- the 2013 Elantra Coupe and 2013 Elantra GT Five-door hatchback -- will go on sale for less than $20,000.

Powered by the same 1.8-liter, four-cylinder, 148-horsepower engine found in the existing 2012 Hyundai Elantra sedan, both cars come with a choice of six-speed manual, or six-speed automatic transmission.

2012 Elantra Coupe

Starting at $17,445 (plus a mandatory $775 freight charge) for the base-level 2013 Elantra Coupe GS with six-speed manual transmission, Hyundai hopes the sport-inspired coupe will offer Honda’s Civic Coupe some tough competition in the marketplace. 

With the manual transmission, Hyundai predicts the Elantra Coupe will get a gas-mileage of 29mpg city and 40 mpg highway. For $1000 more, Hyundai's six-speed shiftronic gearbox lowers gas mileage by 1mpg for both city and highway driving.

While the base level Elantra Coupe GS comes in well under the $20,000 price bracket, the better equipped and more sporty 2013 Elantra Coupe SE Automatic weighs in at $20,745, plus the $775 freight.

Opt for the technology package with navigation system, review camera, premium audio system, dual automatic climate control, keyless remote and automatic headlights, and you’ll be looking at an invoice price in excess of $23,000

2013 Elantra GT

Essentially the same car Hyundai sells elsewhere in the world as the 2013 Hyundai i30, the 2013 Elantra GT is a five-door hatchback, combining practicality and great gas mileage in a sports-inspired car.

Like the 2013 Elantra Coupe, the cheapest 2013 Elantra GT comes with a 6-speed manual transmission and 1.8-liter engine. 

With an estimated highway gas mileage of 39 mpg, Hyundai promises both the six-speed manual ($18,395) and six-speed automatic ($19,395) will be equally frugal. 

Standard features include heated front seat, hidden rear-view camera, and driver knee airbags. 

Both cars attract a mandatory freight charge of $775, while specifying both style and technology packages will set you back another $5,100.

With more cargo and passenger volume than competing cars like the 2013 Ford Focus, 2013 Mazda 3, and 2013 Volkswagen Golf, Hyundai is confident its subcompact will give it some serious market attention. 

Are you tempted by the charms of both the 2013 Hyundai Elantra Coupe and Elantra GT?  Are they both reasonably priced, or are you worried they won’t deliver on Hyundai’s controversial gas mileage promises in the real world?

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Hyundai’s makeover continues to pay off

Fans of the film “Glenn Garry Glen Ross” will fondly recall Alec Baldwin’s ultimate put-down of Ed Harris’ ride, and Ed Harris.

“…you drove a Hyundai to get here tonight.  I drove an $80,000 BMW!”

Point being that in 1992, when “Garry” was released, Hyundai was synonymous with poor quality due to the company's plunging quality control in the late 80s.

Today, however, none of the cars in Hyundai’s fleet are anything but well-made, reliable and reasonably priced for what you get.  The quality improvement has paid off in sales, too. The Hyundai brand climbed 25 percent to achieve the second highest level of improvement in perception of quality over the last five years according to ALG, the industry benchmark for vehicle value.

“Improving perception is like turning a ship, and Hyundai is one of the few brands to make significant progress during the past five years,” said Eric Lyman, vice president, Residual Value Solutions, ALG. “Hyundai’s improved product and marketing are helping consumers understand Hyundai’s increased value in the marketplace.”

Now in its fifth year, ALG's Perceived Quality Study is a semi-annual consumer survey measuring the perceived quality of automotive brands. PQS is one of the ways ALG calculates industry benchmark residual values, helping companies and consumers understand the future value of their vehicles.

The PQS is a good thing in particular as it helps carowners determine resale or trade-in value of their rides when the time comes.

“This level of long-term improvement in perceived quality is proof of Hyundai’s all-around growth,” said Mike O’Brien, vice president, Corporate and Product Planning, Hyundai Motor America. “Car shoppers truly recognize Hyundai as a trusted brand and our recent record breaking May sales is a testament to that.”

Hyundai’s ongoing success is largely attributed to the continued positive reception of the 2012 North American Car of the Year Elantra and Sonata and Accent models, as well as the all-new Azera, all four of which have received significant consumer interest and positive reception since their respective launches. These vehicles, in addition to the rest of the Hyundai lineup, contributed to Hyundai’s success last month with an all-time May sales record of 67,019 units, the second best sales month in company history. Elantra also won a 2012 Residual Value Award from ALG.

Hyundai will never be BMW.  But at least it’s not a punchline anymore.

Source; NY Daily News

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