Marching towards goal of becoming a “Luxury Brand”, Hyundai, World’s fifth largest car-selling company, recently launched three “Not-For-Sale” ultra high end Equus sedans whose interior has been done by luxury fashion label Hermes. Hyundai, which stands for “Cheap and Cheerful” family cars in consumer’s mind, has been trying to move into luxury car market for last 10 years.
Facing stiff competition at home due to South korean government’s free trade agreement with Europe and USA and decreasing share prices have forced Hyundai take groundbreaking step and goal of becoming a “Luxury Brand” is a result of it. Before associating itself with Hermes, Car maker had commissioned Prada in 2011 to co-design limited edition of Genesis Sedan to compete with that of Mercedes and BMW. But, needless to say, it failed miserably. Company could sold only third of 1200 cars it had planned initially.
But this doesn’t stop CMO,Hyundai, Cho Won-hong saying that “The tie-up with Prada “significantly” helped to raise Hyundai’s brand image”. Hyundai doesn’t have prestige perception and associating it with famous luxury brands will not necessarily change consumer perception of the brand overnight. Hyundai does have improved its cars over last fee years in term of quality and design but brand perception is not that of luxury cars. Hyundai needs to integrate its all brand communication message to re-position itself. It needs to look at sponsorship, showroom, showroom experience, advertisements.
Or, there can be another path of launching all togather a new Luxury brand “Genesis”. This path has been used by japanese companies like Toyota which launched Lexus, Nissan launched Infiniti, Honda launched Acura. This path requires lot of investment, as you are creating a whole new brand from scratch, efforts and time but, if executed properly, it will deliver great advantage. Genesis caters to different target audience than Hyundai brand, so there will be no cannibalization and it will also cater rising need of luxury brand which Hyundai is trying to tap. But Again, Mr Cho said “We have concluded that we can do it with only Hyundai brand” as premium brands created by mass market automakers fail to replicate the success of traditional luxury brands.