Hyundai Motor America shifts regional ad budget for national marketing

Article by Christian Andrei, on December 18, 2014

Hyundai Motor America needs more money to boost its national marketing in the United States, and chief executive Dave Zuchowski has outlined his plans to do so. Aside from requesting for a bigger allocation from parent Hyundai Motor Co. in South Korea, Zuchowski is also redirecting funds from its regional marketing budget and scaling back bonuses for salespeople.

He announced the new strategy to dealers on December 2 and confirmed them to Automotive News last week. This year, Hyundai subsidizes for 86 Tier 2 or regional groups of dealers for regional advertising.

The new strategy calls for withdrawal of subsidies from all but the largest 50 markets that account for around 75 percent of the Hyundai’s sales in the US. Dealers in other 36 markets would have to pay for their own ads.

Scott Fink, CEO of Hyundai of New Port Richey, noted that no carmaker has enough market to cover every market in the US. He added that even Toyota does not advertise in 86 markets. Likewise, Hyundai is scaling back its STAR incentive program that allows salespeople to get up to $200 for each new vehicle sold.

Zuchowski admitted that sales at Hyundai America are growing at a slower pace than the auto industry in the US. He quipped that for Hyundai America to grow faster than the US auto industry and increase its market share, it needs greater investment. The carmaker posted a 4-percent drop in US sales for November 2014, and has seen its market share drop by a half-percentage point in the past two years.

Topics: hyundai, marketing

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