Global Brand Strategy of

HYUNDAI Motor Company

Y. I. Kim August, 2006

Executive Vice President

Hyundai & Kia Corp Marketing / Product Planning Div.
Contents

 Brand 1. What is a Brand?

2. Why? Brand
3. Brand, What for?
4. Brand Perception
5. Brand Building

 Hyundai 1. Sales Performance

2. Global Production and R&D Network
3. Product Competitiveness
4. Outside Evaluations

 Brand Scheme
1. What Is a Brand?
2. Why? Brand
3. Brand, What for?
4. Brand Perception
5. Brand Building

■ BRAND
1. What Is A Brand?
A Brand is the sum of thoughts and feelings evoked by a Product or Service about what
it means and does

Family
Fun
Magical

Mulan Crowds

Expensive =
Ultimate Vacation
Florida
Mickey
Wholesome Kids

 Hearts and minds

 A “network of associations”
 Reside in the customer’s mind not in your company
Consumer
2. Why? Brand
 Provide an assurance of quality and consistency as well as simplify decision-making
 Deliver the product usage experience

Road Burger

Last Food for Last Food for

50 Miles 50 Miles
Last Food for
50 Miles
3. Brand, What for?
When you think about BMW and Mercedes, what image does come to your mind?
They are both cars(products), German, world-class quality and expensive -
both get you from point A to point B, but…

German
Expensive
Car
World-class
Quality

Stylish Young
Safe Chauffeur

Dynamic For Self

Driver Traditional
Status
Sporty
Classic
Modern
4. Brand Perception?
Today

No Gap

‘He is a really cool,

excellent and refined
In my childhood.. business man…. He is
Strategy my role model.’
(Education,
Friendship, etc.)

Efforts to
Fulfill

Dream (Goal Setting) Achievement Perception

(to become a successful and • Appearance - DI
respected business man) • Character (Personality) - PI
• Image / Mind / Knowledge - BI
5. Brand Building

Goal Setting

Analysis Achievement

Strategy
How have we
Present “What do we want
been?
“What we are” to be?”

Past Future
From the view of global trend,
corporate value creation
1. Sales Performance
2. Global Production and R&D Network
3. Product Competitiveness
4. Outside Evaluations

■ HYUNDAI
1. Sales Performance

 Global Sales of Hyundai-Kia Automotive Group (In 000)

CAGR : 11%
(Compound Annual Growth Rate) 4,005
3,729
3,230
2,827
2,755
2,512
2,298
2,025
1,721 1,746
HYUNDAI

1,205 1,431 1,494

KIA 1,034 1,081

2002 2003 2004 2005 2006

Global Insight, Mar., 2006

1. Sales Performance

 Regional Sales in 2005

< 2005 Global sales ranking >

(in ‘000)
Group Sales
USA W.Europe China 1 GM 8,730,808

455 350 234 2 TOYOTA 7,891,597

M/S 2.7% 3 FORD 6,476,910
M/S 2.2% M/S 7.9%
4 RENAULT 5,881,205

5 VW GROUP 5,055,910
DAIMLER-
India Korea 6 4,339,029
CHRYSLER

252 571 HYUNDAI-

7 3,728,642
KIA
M/S 18.2% M/S 50.0%
8 HONDA 3,361,803

9 PSA 3,209,109

10 SUZUKI 1,941,103

Global Insight, Mar., 2006

2. Global Production and R&D Network
Note 1 : R&D Network
Europe Technical CTR
California R&D CTR Note 2 : Production Network
America Technical CTR
Japan R&D CTR

Mojave Proving Ground

HMMC, Czech
BHMC, China HMMA, USA
 SOP: FY2008
 SOP: FY2002  SOP: FY2005
 Ownership : 100% HMI, India  Ownership: JV 50%  Ownership:100%

 SOP: FY1998
HAOS, Turkey  Ownership : 100%

 SOP: FY1997
 Ownership: JV 55%
3. Product Competitiveness

 IQS (Initial Quality Study)

IQS is the measurement of Problems Per 100 Vehicles (PP100) after 90 days
of ownership. The less the index is, the better the quality is.
Over the past five years HYUNDAI has improved in IQS ranking at double
192 the industry average.
“Man bites dog, The earth is flat.
HYUNDAI builds better quality cars
156 than Toyota” (excerpted from
Automotive News, Apr.,2004)
143

110 106
121 121 104
111
105
Industry 102 102
Average 147 133 133 119 118 124

2001 2002 2003 2004 2005 2006

IQS data, J.D. Power, 2001-2006

3. Product Competitiveness

APEAL (Automotive Performance Execution And Layout)

APEAL measures customer perceptions on the design, content, layout and
performance of their new vehicles. Higher index represents better
perceptions.

857 858
853 852
853
847 852 853
832 836

Non-luxury
Average 838 844 845 849 853

2002 2003 2004 2005 2006

APEAL data, J.D Power, 2002-2006

4. Outside Evaluations (from Media)
HYUNDAI has been the world’s fastest-growing
major automaker since 1999.
- Lehman Brothers Holdings (excerpted from the April 25 version of Time Asia)

TIME ASIA (April 25, 2005) TIME USA (June 27, 2005) Forbes (April 25, 2005)
HYUNDAI is “putting pressure on HYUNDAI is taking global auto For U.S. automakers HYUNDAI’s
everybody.” -Auto Analyst, UBS industry by storm. rise is like a rerun of bad movie.
1. Global Power Brands (2005)
2. Long-term Brand Vision
3. Hyundai’s Global BI Strategy
4. Implementation of Brand Strategy
5. Product and Design Identity
6. Communication Strategy

■ BRAND SCHEME
III. Hyundai’s Brand Scheme

Consumers

Goal
BI (Setting)

Communication Strategy

Product & Design

1-1. Global Power Brand (2006)

 Global Brands Top 10  Automotive Brands (in Global Brands 100)

(in $ Bil.)
Brand Value
Rank Brand Toyota 27.9 (1)
($ Bil)

1 Coca-Cola 67.0 Mercedes 21.8 (2)

2 Microsoft 56.9
BMW 19.6 (3)
3 IBM 56.2
Honda 17.0 (4)
4 GE 48.9
Ford 11.1 (5)
5 Intel 32.3
VW 6.03 (6)
6 Nokia 30.1

9 Toyota 27.9 Audi 4.17 (7)

7 Disney 27.8 HYUNDAI 4.08 75th Global Brand,

(8) 15% up from ’05,
8 McDonald’s 27.5 Porsche 3.93 (9) ahead of Porsche,
Nissan and Lexus
10 Mercedes 21.8 Nissan 3.11 (10)

- Source : Business Week & Interbrand, July 2006 Lexus 3.07 (11)
1-2. Long-term Brand Vision

Current Status Brand Vision in 2010

Brand Value
(in $ Bil.)

• 9.3 Units
20 • 7.9 Mil Units 20 • $30
• 3.9 Units
• $27.9 • $18
$17.0
• 3.4 Mil. Units
15 • $17.0 15

10 10
• 5.6 Units
• 5.1 Mil. Units • $8.5
• $6.03
5 5
• 3.8 Mil.Units
• $5.1

2 4 6 2 4 6 8
8 Sales Unit Sales Unit
(million) (million)
•Sales data come from Global Insight, mar. 2006 with Brand Values from “2006 Global Best Brands 100”, Business Week, July 2006.
1-3. Brand Positioning and Brand Identity
 Brand Positioning

Premium

Dynamic Refined
& &
Youthful Modern
Brand
Identity

Brand Identity Brand Identity

“Exciting & Enabling “Refined & Confident”

Value
1-3. Brand Positioning and Brand Identity
 Hyundai Brand Identity

Functional Attributes Emotional Attributes

Tangible / rational attributes and themes Emotional attributes and themes
desired for the HYUNDAI brand desired for the HYUNDAI brand

● Stylish
● Sleek Design ● Inspiring

● Intelligent
Refined ● Thoughtful &
Ergonomic & Approachable

Engineering Confident ● Self-Assured

● Excellent Service ● Trustworthy

● Safe and Reliable ● Respected

Global Player
● Top-tier Quality
1-3. Brand Positioning and Brand Identity
 Kia Brand Identity

Functional Attributes Emotional Attributes

Tangible / rational attributes and themes Emotional attributes and themes
desired for the HYUNDAI brand desired for the HYUNDAI brand

● Dynamic Styling ● Fun

● Responsive Exciting
Engineering
& ● Entrepreneurial
Versatility Spirit
●
Enabling
● Well-Equipped
● Trustworthy
● Safety and Reliability

● Top-tier Product ● Respected

&
Global Player
Service Quality
2-1. Brand Positioning and Brand Identity
– Brand Identity is . . .
• Our aspiration for the brand — what we want our constituencies to experience and, in
turn, think and feel about our company

What
Intended
Competitors,
Brand
Channels and
Positioning Brand Beliefs Are
Others Do
Is “Behind the
and Say Formed and
Walls”
Reinforced

What Company What Company

Intends Does and Says
What our
 Brand Positioning Where the Company Constituencies
 Positioning Statement Meets the Consumer Perceive
and Other Stakeholders

INTENT ACTION EXPERIENCE PERCEPTION

Communications, Driving Experience, A network of

Refined & Confident Sales, Service, etc. Thoughts & Feelings
Design, R&D, etc.
2-2. Brand Positioning and Brand Identity
Since brand beliefs are formed at various touch-points, what a company says and does at every constituency need to be
aligned, so that the aspired brand perception can be created in consumers’ minds.

Finance

Human
Resources

Sales
Brand
Business Consumers’ Brand
Strategy
Strategy (Positioning)
Marketing Experience and
Perception

Design

Channels

R&D
3-1. Communication Strategy
 Overview of HYUNDAI’s communication activities

 The ultimate goal of the HYUNDAI communications strategy is to help move HYUNDAI
closer to its aspirational Brand Identity of “Refined & Confident”.

Communication of the
HYUNDAI brand as
“Refined & Confident”
Balanced Moderns
Objectives
consistently and globally Audience

Consistency

Communications
 Integrated Marketing Communication
 Consistent use of visual and
communications standards
3-2. Communication Strategy
 Integrated Marketing Communication
Since the HYUNDAI brand is the sum of all the information available about the company and its
products and services, HYUNDAI integrates all of its communication tools to achieve its Brand Identity.

Advertising
Public Relations
Point of Sale

Exhibitions / Auto show

Motor racing

Sports Marketing
Relationship
marketing

Product placement
Promotions

Direct marketing Web Sites (Information

and E-commerce)

Sales literature Merchandising

3-3. Communication Strategy
Sports Marketing

 Official Partner for FIFA World Cup 2002, 2006 & 2010
World-cup  Official Partner for UEFA EURO 2000, 2004 & 2008
Soccer  Category Sponsor for Korean National Soccer Team
Sponsorship
& KFA (Korea Football Association)
 Chonbuk HYUNDAI Motor Professional Soccer Team

Olympic
 Grand Sponsor of the 2004 Athens Olympic Games
Marketing

 World Rally Championship (WRC)

Motor Racing
 “Click Speed Festival” in Korea
4-1. Past Hyundai Design

 Inconsistency in Design
 No Philosophy and Strategy
 No Design Identity
4-2. Product Line - up

HMC Best Models

A B C D E
in 2005

1. Elantra 427,258

Santro Click / Getz Verna / Accent Sonata Equss / Centennial 2. Sonata 326,655

3. Tucson 267,936
Passenger
Car
Avante / Elantra Grandeur / Azera 4. Getz 215,912

5. Accent 209,490

Tuscani / Tiburon 6. Santro 194,541

7. Santa Fe 171,153
MPV

Lavita / Matrix Trajet Entourage (US only) 8. Grandeur 98,364

9. Porter 91,932
SUV
10
Santa Fe Terracan Starex 90,542
Tucson .
4-3. Outside Evaluations (from Research Institutions)
Elantra
- The most delightful vehicle (Jan., 2005)
(Strategic Vision)
- 1st ranked in “Total Value Index 2004 (Small car)
(Strategic Vision)

Sonata
- The Best Family Sedan in “Drivers’ Choice Awards (Feb., 2006)
(Motor Week)
- 2nd ranked in “Total value index (Oct., 2004)
(Strategic Vision)

Grandeur / Azera
- Top Car in 2006 Vehicle Satisfaction Awards (May, 2006)
(AutoPacific)

Tucson
- 1st ranked in “2005 Total Quality Study (Small SUV)
(Strategic Vision)
4-4. What is the Hyundai product and design?
Well…. then, what about Hyundai? What attributes come to your mind,
when you see Hyundais on the streets?

“Global quality”
“Modern Design”
“Value for money”
“I don’t know”

“Traditional”
“Asian”

“Unattractive” “Practical”

“Hyundais are not bad, but

still not good enough”
5-1. Design Identity

 HYUNDAI’s New Car Development Directions

Design Sleek and Refined Style

Package Ergonomically engineered, Convenient & Comfortable

Performance
Balanced Performance
(Ride & Handling, Engine Performance)

Must-haves Safety and Reliability, Top-tier Quality and Service

-7-
5-2. Product Identity (Example)
Peugeot Citroen

 Conventional, Sporty, Dynamic  Innovative, cozy, radical

- Values on Solidity, authenticity - Personality, originality
- Joyful and young

 Dynamic Style (Peugeot - 307) / Innovative Design (Citroen – C4)

▶ Same platform + same wheel base

• PF2 ( C1 Seg )

307

 Specifications:4,212×1,746×1,510 (L x W x H)
 W/Base:2,608
 Sales :480,926 (’05), released in Feb., ’01

C4

 Specifications : 4,273×1,773×1,471
 W/Base : 2,608
888 (307) 2,608 716 (307)

 Sales :217,579 (’05), released in Sept., ’04 935 (C4) 4,212 (307) 730 (C4)
4,273 (C4)
5-3. Product and Design Identity

 Design Identity

Unique Design
Identity

Up until now Hyundai has not built up its

own identity in design, due to
- Relatively short history in automotive industry Sleek and Refined Style
- A variety of design experiments
5-4. Familiarity
6-1. Glocal Brand & Product Strategy

Hyundai will Introduce cars and trucks on a glocal basis to cover one big global
market and to meet local consumers’ tastes
(taking into account differences in cultures, emotions and consumer characteristics)
K (Korean) - Factors
Let’s think about following….
Taiwanese brand, design and characteristics
- Cultures
- Philosophy
- and so on…

→ T (Taiwanese) - factors
“Thank you”