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Current Business Issue Essay

The economic recession has also curtailed the growth of the auto industry that was introducing new models every month. Besides, the boom period had also allowed the creation of new jobs to millions of workers worldwide, in various sectors, including engineering, finance, insurance, marketing, sales, and customer support. However, the most beneficial aspect of the boom period in the auto industry allowed many people to fulfill their dreams of owning a brand new car.

With the economic bust, the consumer confidence also shattered, as they were gripped with a fear about payment of car loan, in case of unemployment. This fear among the consumers prevented them from buying a new car, in spite of several incentives that were introduced by the car manufacturers as well as the car dealers. As a result, the car sales dropped drastically in 2008. According to Business Standard (April 1, 2009), the sales of light-vehicles in the USA plunged in 2008 to the lowest level ever since 1992, even though several promotional schemes were launched by the auto industry for enticing the potential consumers.

But, the South Korean auto giant, Hyundai Motor Co., adopted an innovative promotional marketing strategy to boost the sales of its cars in

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a recessive market when marketing strategies by other car manufacturers were failing. It offered a new scheme called “Hyundai Assurance” program with the start of New Year 2009. It guaranteed a partial refund to the Hyundai car buyers, if they were unable to pay for the loan due to several reasons mentioned below:

            *          unemployment

            *          personal bankruptcy

            *          accidental death

            *          disability

            *          job transfer overseas

Business Standard also reported the claims of Hyundai Motor Co. that there was a surge in its car sales in the US market. Their report also suggests an increase in consumer confidence, since the Hyundai car sales experienced a remarkable 20% increase in December 2008 and January 2009, in contrast to the same period in preceding years.

This clearly shows the success of the innovative “Hyundai Assurance” program, while other promotional marketing programs like reduction in car loans, discount in the existing car prices, and other incentives by competing car manufacturers, failed to deliver a positive impact on the declining consumer confidence, and the consequent reduction in car sales. So who gave the innovative idea of “Hyundai Assurance” program?

Business Standard highlights that the Hyundai Motor Co. gives the credit of its innovative buyback assurance program to the consumers, who had acknowledged that the existing economic recession had created a fear of job loss, and the concern for payment of car loan. Indeed! Necessity is the mother of invention.

The customer survey prompted the Hyundai Motor Co. to devise a customer-friendly marketing strategy that would allay the fears of buyers about payment of car loans, in case of unemployment. The company promised to payback the difference between the estimated value of the car and the car loan, with a maximum payback limit of $ 7500, provided the stipulated payback conditions were met by the customers. The low-price car segment from Hyundai group has enabled the company to emerge as the market leader in this category.

Hence, it may be concluded that the “Hyundai Assurance” program will enhance the sales of its cars in

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the low-price segment. In addition to its innovative marketing strategy, the company is also quick to launch new models that are cheaper, which also compete with existing luxury models. Business Standard reported that Hyundai had hired the professional services of a company, Walkaway USA LLC, for its promotional marketing program. Three cheers to all pioneers of the car buyback scheme, “Hyundai Assurance”!

References

Business Standard. (2009, April 1). Hyundai buyback offer lures new customers. Retrieved April

1, 2009, from http://www.business-standard.com/india/news/hyundai-buyback-offer-lures-new-car-buyers/346464/

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