Hyundai's pricing (r)evolution

Last week, Hyundai dealers from all over British Columbia gathered for a meeting with Hyundai executives. Before the first coffee break, it was clear that Hyundai is changing, and rapdily. Strategically, the car maker is moving away from competing mostly on price and massive rebates. With Hyundai launching so many new products in recent months -- including Tucson, Sonata and Elantra -- its focus now is competing on value. It is striving to convince consumers that they are getting a world-class product with a stick price that reflects its true value. That means shifting away from "cash on the hood" discounts to offering extremely competitive prices on all its new vehicles, right from the initial lauch of new products. For example, the new 2011 Elantra, despite the addition of new options and features worth more than $2,000 -- features the previous version did not have -- the car's price did not change. The goal is to improve Hyundai's brand image. Despite awards, increased sales and positive reviews, a significant number of consumers still won't consider Hyundai. However, more than 50% of people choose Hyundai after coming to a dealership. The goal is shift the mindset that Hyundai is nothing but a bargain-priced vehicle.

This new strategy comes with certain risks, of course. Will consumers, who are bombarded with rebates, discounts, special programs, push-pull-and-drag schemes and all the typical sales tactics, recognize the value in a Hyundai vehicle? Can we explain and show that value without the lure of $5,000 rebate? It helps that Hyundai vehicles are earning solid reviews from consumers and journalists. The new Elantra was the best selling car in Canada in January. If Hyundai continues to produce high-quality vehicles, packed with features, that appeal to Canadians, its strategy should work just fine.