Reaction to US Shutdown
“A crisis is the best opportunity.” This aphorism applies to Hyundai and Kia Motors’ marketing strategy these days.
Due to the US government shutdown, many federal employees are experiencing financial difficulties. To help those workers, Hyundai Motors made a marketing program that supports affected employees.
Amid Hyundai and Kia’s recent sluggish sales performance in the US market, Hyundai is using its Assurance program again after 2008. Thus, the company is receiving a lot of attention in the industry, for an increase in auto sales is possible again.
On October 1 (local time), the Hyundai Motor Company announced its Assurance program to defer all the auto loan or lease payments for furloughed federal employees during the shutdown. It is expected that the number will exceed 80,000 people. The company will give them a grace period in payment for 90 days if they desire to buy new cars during October.
Last month, Hyundai and Kia Motors sold 55,102 and 38,003 units each in the US market, a year-on-year decrease of 8% and 21%, respectively. The total earnings in September fell by 13.9% compared to the same period last year. The total units sold in the US were below 10,000, for the first time in seven months. In February, only 93,816 units were sold, but the sales performance last month is the worst in January-September.
During the global financial crisis, Hyundai offered the original Assurance program in the US that allowed buyers to return their cars if they lost their jobs within a year of the car purchase. In a month, the company also revealed its Assurance Plus program, where Hyundai would waive up to three months of monthly installment payments to unemployed car owners during the job-searching period. Thanks to these programs in 2008, the company became one of the fastest-growing brands in the US market. In the same year, the total sales volume of Hyundai and Kia cars was 675,000 units, but edged up to 735,000 units in 2009.