DMN3 Blog

The New York Times this week does another story on Hyundai. If you have followed my post about Hyundai and read the DMN3 Institute article on Marketing in a Recession you know that they predicted a significant growth in sales, market share and profits for Hyundai based on previous studies on the impact of marketing during a recession.

Some of the New York Times story highlights include:

• Hyundai and its partner Kia Motors accounted for 8 % of the U.S. new vehicle market in August 09...compared t 7.4 % for Chrysler
• August 09 sales topped August 08 sales by 47% compared to industry sales increase of 1 %
• They expect to sell more vehicles in the U.S. this year than they did in 2008, a claim only one other automaker, Subaru, can make.

Aggressive marketing, along with a product line to back it up, is the reason Hyundai’s sales are surging. The automaker introduced a first-of-its-kind offer early this year that lets customers who find themselves without work return their car with no penalty for up to a year. It later expanded the offer to include up to three months of payment relief.

G.M. and Ford briefly offered similar programs after the Hyundai program helped increase sales.

Hyundai also jumped ahead of competitors this summer, by inviting customers to turn in old, inefficient vehicles under the cash-for-clunkers program three weeks before its official start.

“The current economic climate really places an emphasis on people spending their money wisely,” said George Glassman, a Hyundai and Kia dealer in suburban Detroitl

“They’re appealing to people’s desires to spend reasonably and to get great value for your dollar,” said Glassman.

“They’re really trying to use this recession as an opportunity to take market share, which they have,” Jessica Caldwell, director of industry analysis at Edmunds.com.

Why am I still blogging about this? It's because that companies keep failing to learn the lessons that previous research provides to us. Instead they often take knee jerk actions to cut marketing to maintain margins. If fact aggressive marketing is the path to increased margins. Hyundai profited from the research and used it to increase its market share by more than 50%. Aggressive marketing during a recession that markets to the mindset of consumers pays dividends in sales, market share and profits. Research also shows that the gains will continue as we recover from the recession. The management of Hyundai should be commended for using the recession as an opportunity. Don't believe me? Take a look at the market share graphic and the spike in market share recorded by Hyundai.

Perhaps others will learn before the next recession. Then again....maybe not!