Hyundai's revamped Sonata
This is probably not the best time to launch a mid-sized sedan. The market is not only crowded, but it is crowded with a billet of new and newly redesigned -- and well-reviewed vehicles like Malibu, Camry, Accord, Fusion and Altima. It is every automaker's high-volume segment, and it is where automakers reputations are made or broken. And it is not necessarily consumers' first choices when it comes to fuel efficiency, since smaller cars do get better mileage. Into this headwind Hyundai has recently launched its new, or almost new, Sonata.
The company did a refresh of the car, adding new features and redoing the interior as a stop-gap before the car gets a total redo in two years. The changes to the vehicle design, realized for the U.S. market in the company's Ann Arbor, Mich., tech and design lab, comprise some thousand alterations -- per Michael Deitz, manager of product planning -- including new grill, headlamps, tail lamps, moldings, and a new instrument console between driver and passenger that has iPod and USB auxiliary inputs.
The car began rolling into dealerships in March, and ads began two weeks ago launching on "Where in the World is Matt Lauer?" Deitz says the car will bring in buyers from both domestic and import brands; and that the current gas prices should benefit sales. "We are looking to have this as a destination for people defecting from SUVs," he says, adding that owners of domestics will see the car as a move-up vehicle, a far cry from Hyundai's mid-1990s rep.
"And we have found from focus groups that domestic buyers really look as at Hyundai as a step-up brand," he adds. The company this summer launches its first luxury sedan, Genesis, a limited-volume car emblematic of the company's efforts to shift its portfolio -- and image -- up market.
"Genesis is about showing consumers what we can do with a lower-volume, built-to-demand vehicle; it will show consumers what we can do with technology and performance capabilities," he says, adding that the car will have 375 horses under the hood.
Deitz says Sonata and Genesis are part of the Korean automaker's second 24/7 program (7 products in 24 months).
As far as gasoline prices go, Deitz says the company is benefiting from being weighted in with small cars like Accent and Elantra, the former a subcompact. "Right now, people with that mentality are coming to the brand, and resale values are also improving." Currently, Hyundai, with a CAFE of 28.6 mpg, is third in the U.S. market for fuel economy after Toyota and Honda. The industry average is 25.3 mpg, per the EPA.
In sales, Hyundai has been No. 4 since 2002 behind Nissan, per Deitz, who says that for every customer Hyundai loses, it is gaining 2.2 new ones, putting the brand in the No. 2 spot after Toyota in terms of new-customer conquest.
Sonata has been a pillar of Hyundai's sales growth over the past few years. Sales of the car have grown, on average, by 30% between 1998 and 2007. The company last introduced a new model of the car in 2006. Hyundai reports that its overall sales have increased 20% during that period, and that its U.S. market share has gone from about 0.6% to about 2.8%.
Deitz says marketing messages are focused on the car's interior volume and mileage, partly to capture emigrants from the world of SUVs. "The message is interior volume, fuel economy and versatility, with features like the 40/60 split-fold rear seat. We are doing sales training to get to consumers coming out of larger vehicles and seeking better fuel economy."
by Karl Greenberg