2020.07.20 Hyundai Motor Company
Hyundai Dominates Vietnamese Market
Hyundai Motor Company became the best-selling automaker in Vietnam this year. It is four years since Hyundai jumped in the ASEAN market. Here are details of how Hyundai attracted its customers there.
Vietnam is considered as the 'land of opportunity' in Southeast Asia. And Hyundai succeeded in seizing it. It all started when Hyundai established Hyundai Thanh Cong Manufacturing Vietnam (HTMV), a joint venture between Hyundai and Thanh Cong Manufacturing. So far, Japanese names such as Toyota, Honda, or Mazda have been ruling the area, but Hyundai marked second-biggest sales only a year after the company began its business, then became the best-seller in the country, edging out Toyota.
Hyundai sold 25,358 vehicles in Vietnam in the first half of 2020. Its sales dropped by 17%, but this was relatively minor damage, considering the fact that total sales dropped 27% in Vietnam. The company's market share increased by 2.6%, marking 21.3%, which is bigger than Toyota's 21.1%.
The two small-sized vehicles, Accent - 7,192 units were sold, marking the second best-selling car in Vietnam - and Grand i10 - 5,631 units - were popular models in Vietnam. Kona, Tucson, and Santa Fe also became the top ten sellers, of which 2,979, 3,247, 3,509 units were sold, respectively. Speaking of Kona, especially, the sales increased by 7 percent compared to last year.
Vietnamese government poses high taxes on private cars, so people mostly drive cars with engine capacity below 1500cc. As these vehicles get to replace motorcycles, the cost-efficient and compact Grand i10 is also getting popular among the Vietnamese people, which is called the 'People's Car
The company's marketing strategy also has been helping the brand increase its market share. It included web series, user-experience programs, and traffic safety education, all to get closer to Vietnamese customers.
'Who will be my future family?', the eight-episode long web series/brand commercial Hyundai created for the young generation, marked 50 million views. Young actors from South Korea and Vietnam starred as young employees working at Hyundai, for a positive brand image. Also, collaborating with CJ ENM, Hyundai created brand advertisements and clips about must-know rules of movie theater etiquettes to be played at the movie theater CGV right before the showtime.
The company also initiated Corporate Social Responsibility (CSR); it donated 10 Solati ambulances full of special medical equipment in case of a COVID-19-related emergency. And as another CSR initiative for traffic safety education for children, the company produced a children's movie for traffic safety issues and donated safety equipment for Vietnamese children as the number of vehicles on the roads increases by huge.
The company lets its customers take a Kona for a travel-themed test drive with their local Hyundai dealer, and initiated amateur soccer league sponsorship for another marketing strategy. Hyundai plans to release the facelifted version of Accent and Santa Fe, and will extend its warranty from 3 to 5 years.
Just as GDP Growth Rate in Vietnam is expected to be 7 percent, the Vietnamese automotive market is also growing rapidly every year. According to the Vietnam Automobile Manufacturers' Association (VAMA), automotive sales in Vietnam has been growing since 2014, from 226,000 units in 2017 to 348,000 units in 2019. Vietnam indeed is an attractive market for automakers with a lot of potentials and is expected to have a bigger population with changing lifestyles.
In the production joint venture with Thanh Cong Group, Hyundai began exporting its cars in Complete Knock Down (CKD) format to Vietnam in 2011. And in 2017, these two companies established Hyundai Thanh Cong Manufacturing Vietnam (HTMV) to produce complete cars, then signed a Memorandum Of Understanding (MOU) to strengthen their marketing strategies.
Starting from the end of June this year, the Vietnamese government has approved a plan to lower 50% of registration fees for domestically assembled cars to boost the economy. And to meet the increasing demand, Hyundai plans to build a second factory of HTMV capable of selling 100,000 units annually. Along with the production plant in Indonesia, this would be one of the core production facilities to survive the ASEAN market.
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