More Volume Or Head Upmarket? Hyundai Chooses Both.

When CEO Chung Mong-Koo told his employees to make Hyundai’s quality world class, their competitors all had a collective laugh. Well, we all know how that ended, so when Chung told his employee to increase sales, the competition should probably heed his words as a warning. The Korea Times reports that Chung Mong-Koo wants the Hyundai-Kia group to increase sales by 17% in 2010, from 4.63 million (2009) to 5.4 million. “Our teamwork helped turn a crisis into an opportunity when the global auto industry was at its darkest,” said Chung Mong-Koo. “Based on our achievements last year, let’s work together to make 2010 a year of writing a new history.” Analysts like Sohn Myung-woo of Woori Investment & Securities sees the goal as achievable, saying “Hyundai will continue its sales momentum in the U.S. and emerging markets such as China and India.” But besides expanding volume, Hyundai wants to use its momentum to continually improve its brand image in mature markets like the US. To that end, it’s paying more attention to how it markets its Genesis luxury semi-sub-brand.

USA Today reports that Dave Zuchowski, Hyundai’s U.S national sales chief, has sent a memo to Hyundai dealers across the United States stating that they need to do more in order to separate between regular Hyundai cars and the Genesis. And when they say “separate,” they mean “separate”: the ultimate goal is to create a “showroom within a showroom.” However, on Hyundai’s website, the Hyundais and Genesises (Geneses?) are side by side with each other. Hyundai are trying to avoid separate dealerships for the luxury brand, like Lexus, Acura and Infiniti did. While this “showroom within a showroom” technique will be cost efficient, it may not work in the long run. What partly helped Lexus, Acura and Infiniti get sales was the fact that they stayed separate from their mass volume marques (Toyota, Honda and Nissan, respectively), thus giving the impression that a new boy had come to the market. For better or worse, the “showroom within a showroom” idea will always keep the Genesis linked to Hyundai. Is the US market ready for a brand that spans from a $10k Accent to a $60k Equus, or will a velvet rope be enough to differentiate them? Only one way to find out.