Hyundai Wants Customers to Return for the Friendship, Not Bargains

Hyundai has a problem to solve. Interest rates are on the rise, car buying is on the decline, and it has a newish luxury division forced to share showrooms with its regular models — most of which are moving out of the bargain bin.

However, rather than continue incentivizing the crap out of its vehicles, the automaker has decided to improve its dealership experience. There’s no official word on the amount of hugs Hyundai plans to dole out to prospective buyers, but the automaker does claim it wants to instill a warm fuzzy feeling in its clientele.*

(I could have used a hug after the high-pressure sales tactics dumped in my lap during a spring Hyundai dealer visit, though a zero-percent APR financing offer was enough to lure me off the street. In the end, no deal. – Ed.)

“I’m trying to walk away from the lowest offer,” Dean Evans, the brand’s chief marketing officer, told Automotive News. “I’m trying to find other value and a better experience in a brand that people love more and want to pay more money for. Then when harder times come and interest rates are higher and floorplan is going up, we’re still hopefully selling cars and our retailers are doing better because we have more throughput and better brand strength through this cycle.”

While that statement comes across as slick marketing talk, there’s a lot of truth in there. Hyundai is not the bargain brand it once was. That’s not a slight, either — Hyundai manufactures increasingly impressive vehicles each year, leaving it with fewer reasons to aim low. It also has its luxury brand, Genesis, occupying space on the same lots as its mainstream vehicles — at least until it finally ushers those models into standalone stores. But, while those premium autos still represent good value for money, they cater to a different sort of customer. They’re expecting something more for their money and Hyundai doesn’t want to leave them wanting.

“You’ve got to have something in front of them besides a big, fat rebate,” Evans said of Hyundai brand customers. “[Customers] remember us because we’re this good brand. They don’t remember us because we have the best warranty and the lowest price.”

We’d argue Hyundai’s competitive pricing, exceptional warranty, and continued efforts to provide its products are all part of its success, recent car-related sales downturn notwithstanding. If it can maintain those elements, while simultaneously ensuring reliability and treating customers like they’re royalty, there’s nothing stopping it from being subject to endless praise.

However, people really seem to like a “big, fat rebate.” If Hyundai moves too far from its bargain roots, there’s a chance many customers won’t accept it. Slow and steady is definitely the way to play the pricing game, letting those who can’t afford more gradually slip into the loving and affordable arms of Kia.

Shopper Assurance plays a big part in this new strategy. By allowing participating Hyundai dealers to post the market price, minus incentives, directly and clearly on the main website, the brand can effectively remove haggling from the equation. That’s great news for younger buyers who are less apt to walk in and play hardball, and even better news for Hyundai, which no longer has to negotiate a final price. Evans said most shops gladly adopted Shopper Assurance, noting that there have some a few holdouts. Currently, the program is in effect at 720 of Hyundai’s 840 U.S. dealerships.

“We have volume dealers that believe in the $69-a-month Elantra, and [customers] walk out with $350 a month,” he said, noting that both parties finalize the transaction amicably most of the time. “[With additional emphasis placed on overall experience] imagine what your satisfaction scores would be like.”

[Image: Hyundai]