Hyundai Marketing Strategy

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Marketing Strategies - HYUNDAI

The case discusses the marketing strategies of Korea based Hyundai Motor Company (HMC) in India. HMC entered India by establishing its wholly owned subsidiary Hyundai Motors India Limited (HMIL) in 1996. Within a year of launch of its first product - Santro, HMIL had emerged as the second largest car company in India.

The case describes in detail the entry, product, pricing, distribution and promotional strategies of HMIL. The case briefs the challenges faced by the company and its marketing plans in future. It also includes a note on the Indian passenger car industry, the leading player and its marketing strategy.

I believe that the primary reason for HMIL's success is that we never allowed ourselves to be complacent. We were continuously innovating at the marketplace, taking ourselves head on the competition."1

- YS Kim, former Managing Director, Hyundai Motors India Limited in 2002.

"As long as Hyundai keeps giving the Indian customer fresh new products at competitive prices and builds excitement around them like they have successfully done, they can sustain their good run so far."2

- Vinay Kamath, Journalist with Businessline in 2002

The Price Cut

In August 2004, a leading business newspaper reported that Hyundai Motors India Limited (HMIL), an Indian subsidiary of the South Korea- based Hyundai Motors Company (HMC) was expected to reduce the price of its flagship car - Santro - by as much as Rs 40,000. Industry experts were expecting a reduction in Santro's price in response to the price war being waged by the market leader in India - Maruti Udyog Limited (MUL), which had reduced the price of its largest selling car in the B segment - Alto - by Rs 58,000 in two price cuts starting from September 2003. This move had resulted in Alto replacing Santro as the largest selling car in the B segment in the period January to June 2004

Rebutting the report on price cuts, HMIL's managing director, BVR Subbu said, "We are not cutting prices on the Santro. We have allowed our competitors the prerogative of cutting prices."5 Several dealers of HMIL also felt that the company would not reduce Santro's price as it had not adopted such tactics earlier.

Santro had been the most successful product of HMIL and was also the largest selling car in the B segment till the fiscal year 2003-04.

Introduced in late 1998, Santro had emerged as the second largest selling car in India after MUL's M800 and had retained its position till March 2004 (Refer Exhibit II for the total units and value sales of the top eleven car models in India).

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