As more automakers have decided to cut prices in order to raise sales, Hyundai will be doubling its advertising expenses to about 630 million euros ($821 million) in Europe to increase its market share. . Hyundai believes that it has an image issue, something that European automakers will probably not believe.
Hyundai found out after conducting some research that more consumers will be attracted to its in-demand models such as the Hyundai i30 hatchback if only it’s built by another brand. When interviewed about the plan to increase the ad budget, Mark Hall, Hyundai Europe's marketing director, said that it’s “an absolute necessity.”
Hyundai attributes its success to its offering of the i30 and its other models that are European designed, engineered and built. Because of this, Hyundai was able to give itself a makeover from being an automaker focused on SUVs and with some quality issues to being one of the hottest automakers around. In the past couple of years, sales growth has averaged almost 10% while the European Union economy suffers.
Hyundai was able to widen its market share to 3.4% in 2012 from 2.6% in 2010. But then, Hyundai presently doesn’t expect many of its customers to be loyal to the brand. It thinks that about half of the first-time buyers who flocked to Hyundai for its inexpensive prices will be going to rivals with a better offer.
When interviewed by Reuters, Hyundai Europe Chief Operating Officer Allan Rushforth said that around 70% of its “vehicle parc” in Europe is less than five years old. Rushforth and Hall recognize that in order to keep its customers and reel in new ones, they have to give customers an emotionally-charged reason to acquire its vehicles as well as logical reasons such as value for money.