VP, Marketing & Sales | 09 Jun 2006
“We began with the ‘tall boy’ image for the Santro. We used SRK very well. He gave good awareness to the company and to Santro. Today, the Santro is increasingly being considered as a first-timer car. Earlier, people were buying the Maruti 800 as their first car. Today, 35-40 per cent people are buying the Santro as their first car. Not just that, more and more people are upgrading to the Santro.”
A 23-year veteran in the automobile industry – both two-wheelers and four wheelers – Arvind Saxena began his career with Escorts (Motorcycle Division) in 1983 as management trainee in the sales and marketing function. After a successful stint of nine years with Escorts, Saxena joined Bajaj Auto as Regional Marketing Manager.
He then moved to Maruti Udyog Ltd, where he spearheaded Maruti’s all-India sales as CGM, Sales. Saxena spent a successful decade with MUL, where, with his leadership skills and strategic thinking, he contributed immensely to the company’s growth.
After MUL, Saxena joined Hyundai Motor India Ltd in November 2005 to manage sales and marketing operations at the all India level. In conversation with exchange4media’s Kalyan Kar and Pallavi Goorha, this Mechanical Engineering graduate from Moti Lal Nehru Regional Engineering College speaks about Hyundai’s brand journey in India, in-house agency Innocean and plans for achieving leadership position in the automobile industry. Excerpts:
Q. What is the positioning of Hyundai as a brand in India? And how is your positioning different from, say, that of Maruti Suzuki?
The brand positioning of Hyundai cars is that they are the latest in technology and styling. We offer the same product across the world – a new model is launched around the same time all over the world. We believe in bringing more value for money cars. But, at the same time, one has to keep in mind that you can’t get advanced features without paying for it. That is the way we have built our brands. Our Indian customer gets the same product that our global customer gets.
Q. Can you give us a perspective on how the positioning has changed over the years since you entered the Indian market?
When Hyundai entered the Indian market in 1998, it was a big challenge to introduce Hyundai as a company initially. It was a dual job for Hyundai – we had to establish the product and the company as well. And it was done successfully. Subsequently, we have brought in models aggressively into the market. Today, we have a complete line-up of cars across all segments. We see the market expanding.
Q. How has your brand communication evolved over the years?
When we entered India, the market was changing, people were looking for safer and more efficient vehicles, more value for money. We tried to fulfil the consumers’ expectations by giving them technologically advanced cars with more features and more value for money. That has been our product positioning as well.
Q. The Santro primarily rode on the shoulders of Shah Rukh Khan to establish itself as a brand in India. Now you have signed up Sania Mirza, too, as brand ambassador. Are there any special traits that Hyundai seeks in the choice of celebrities for its brand icons?
We began with the ‘tall boy’ image for the Santro. We used SRK very well. He gave good awareness to the company and to Santro. With changes in the tax structure, the Santro is increasingly being considered as a first-timer car. Earlier, people were buying the Maruti 800 as their first car. Today, 35-40 per cent people are buying the Santro as their first car. Not just that, more and more people are upgrading to the Santro as well. We see a larger market available for it today.
We opted for SRK as we found him to be the right person to capture attention. Today people think about Hyundai and Santro together, and this works very well for us. It has helped us break through the advertising clutter and get across to our target group. Sania Mirza is an upcoming star. She has created a good rapport for the Getz. Though we haven’t used her effectively till now, we will be using her for more campaigns in future. We use celebrities according to our requirements.
Q. But the biggest celebrity is Sachin Tendulkar. Why couldn’t he deliver for Fiat’s Palio?
Just putting a nice face doesn’t sell a product. You should develop the product over a period of time and not lose out on the basic strengths of the product. We are talking about product strengths with a storyline in the TVC featuring Shah Rukh Khan which went on air on May 18 this year. The ad talks about product strengths in a subtle way, and SRK helps in getting that across to the consumers. It is important to use celebrities effectively.
Q. Hyundai is still the No. 2 carmaker in India behind Maruti Suzuki. Do you have a long-term marketing strategy to become the market leader?
We may be the No. 2 carmaker in India, but Hyundai is the No. 1 exporter! We are investing heavily on our second plant. We are increasing our capacities and volumes. The way the market is evolving and with increasing domestic demand, we are confident of continuing as a dominant automobile player. We will strive to retain our position as the No. 1 exporter. We will be bringing in as many models as possible to gain a segment leadership position.
Q. What kind of connect does Hyundai Motor enjoy with the Indian consumer?
Hyundai was the first company to create a car after listening to customers. We had made minor changes in the Santro after consumers gave us their feedbacks. We created the Santro Zing after listening to our customers. Today, when we think of coming out with new models, we like to get back to our customers. Customers really appreciate that part. That is the biggest reason why we have been able to attain success in a short time as we could deliver what our customers wanted and gave them good quality on time. Hyundai is tuned in to its customers’ expectations.
Q. There has been a perception that Korean cars lack in technology. Your comments.
Eight years back, I would have agreed that the technology in Korean cars was not good. But today, Hyundai has come a long way. We have been able to break the weak image that Korean cars earlier had. We have a new plant in Korea. We have won various awards for safety. Sonata has been able to carve a niche for itself in international markets. We have launched a new model, Azzera. We have introduced the latest CRDI technology for our diesel engines. We have invested a lot on R&D. We have R&D centres in Europe, Korea, China and India. A lot has changed in the last 4-5 years.
Q. What prompted you to have your own in-house agency, Innocean?
We took the decision to have our own in-house agency from the long-term perspective. The market has become even more competitive due to the Internet. We work across different countries and have accumulated several learnings that we can use. Innocean is totally dedicated to us and is doing work only for us. In terms of resources it is totally captive as it has nothing else to think about. We felt the agency will be very good for our brand.
Q. But couldn’t the same have been delivered by your agencies over the years? Do you see a qualitative difference?
The other agencies were not dedicated to us, they had other clients too. It’s not that we weren’t happy with their work, they have done very good work for us, but they lacked a complete understanding of our markets globally. In contrast, Innocean, being our in-house agency, has a complete global perspective on the brand. We aim to be among the top 5 carmakers in the world by 2011.
Q. Is Hyundai planning to introduce a compact car powered by a 1.2-litre diesel engine? If so, wouldn’t that cannibalise the successful Santro?
Yes, we are planning to launch a car with a 1.2-litre diesel engine, but it is too early to talk about it. Diesel is emerging as an important segment today. Come to think of it, there is very little choice that the consumer has in diesel cars, except the Tata Indica. Diesel will expand the market, but I don’t see it cannibalising the Santro. It’s true that diesel technology is expensive, and we have adopted the CRDI technology for our diesel engines. With petrol prices going up, demand for diesel cars will go up too.
Q. The success of Hyundai as an automobile brand seems to be primarily because of the popularity of the Santro and Accent. Why have your other models not fared so well in India?
The Santro and Accent have done well in the volume segment. In a market like India, small cars will always dominate bigger cars like the Sonata. But we need to optimise our capacity constraints. The big cars are small volume cars and cater to niche segments.
Q. The Accent is a very successful model from the Hyundai stable. Yet, there is talk that you are planning to withdraw this model from the market.
Frankly, there is no such plan at all – the question does not arise. Hyundai has no intention to discontinue a hugely popular and excellently performing model from its offerings line-up. Even we are surprised as to where this rumour emanated from! The Accent is serving its segment very well and it will remain a strong performer in its segment for years to come. As a matter of fact, we have sold 3,500 units in the month March 2006, an all-time high in sales. In April 2006 also we sold 2,039 units and plan to continue this performance in future. This shows the kind of trust people have on the Hyundai Accent.
Recently, the Accent has won two awards – TNS “Accent Petrol - No. 1 Entry mid-size car” and “Accent Diesel – No. 1 Mid-size diesel car”.
Q. The compact car segment is becoming increasingly competitive. How do you see Hyundai countering that in the wake of new launches from GM, Honda and Toyota?
The scenario was very different when Hyundai stepped into the country some eight years ago. Over this period of time, consumers have evolved, markets have become highly competitive, newer segments have emerged, and technology has advanced majorly. Compacts constitute the largest segment in India. It comprises almost 65 per cent of the total car market and has the biggest buyer group. We have a good product line-up. We are confident of our state-of-the-art R&D set-up, deeper product knowledge, engrained marketing expertise which will help us grow further and secure a dominant position for ourselves in the market.
Q. How has the response been to the recently concluded nationwide road show for Hyundai cars?
We had found that most of our activity was localised in Delhi. India is so diverse in terms of geography; hence, we decided to take the Hyundai models to various parts of the country. We have carried out similar shows in 34 countries. In India, apart from our eight existing models, we also displayed the Azzera and the Cupa, cars that we export, in the two-day road show. It was a good opportunity to display our cars as well as get consumer feedback. Nearly 40,000-50,000 people visited the road shows and we have received good feedback.
Q. Any new launches in the pipeline?
We are launching the Verna, which is a premium mid-sized car, in India by the end of this year. We launched the Verna in the US, Australia, and Singapore in the last 2-3 months.