Driving off-road

BRAND LAUNCH LEAST SUCCESSFUL

Hyundai hasn't done enough to change customer perception of its Rs 10-lakh plus vehicles "" which is why the Tucson has suffered

Last year, Hyundai's Santro Xing won the Derby for the most successful relaunch. This time, however, the company has a loser in the Tucson ("Too-sawn"), its crossover sport utility vehicle (SUV), which Derby respondents rated as the most unsuccessful brand launch of 2005.

Fifty-eight per cent of those polled considered the Tucson to be not successful, with 8 per cent considering it the least successful launch. Why hasn't the Tucson been able to make an impact?

Hyundai already had a full-fledged SUV in the Terracan (Rs 20-21 lakh) when it launched the Tucson in April 2005. The company says the aim to rollout a softer SUV, which merges the luxury and comfort of a sedan and the build and feel of an SUV, at around Rs 15 lakh was to consolidate its position in that space.

"Between Rs 10 lakh and Rs 20 lakh [for Terracan] there was a huge space where consumers were looking to invest to upgrade to vehicles like SUVs. We needed a vehicle to meet the aspirations of customers who had the desire to own an SUV but not the money to invest in the Terracan. The Tucson, which was then our latest offering worldwide, was our answer for that category," says Sanjeev Shukla, marketing manager, Hyundai Motor India.

Industry watchers say the rollout of the Tucson appears to be driven by the success of the Honda CR-V, again a sedan-cum-SUV in the Rs 14-15 lakh range, which was launched in 2003, and sold some 1,600 units in 2004, gaining a market share of 35 per cent in the segment.

They believe Hyundai wanted to gain an edge in this market by offering features and comfort similar to the CR-V but in a diesel (CRDi) version, which neither the CR-V nor most other SUVs were offering.

Says the editor of an auto magazine, "Differentiating itself with a diesel engine was a good strategy. But then people wanted a Honda with a diesel engine rather than a Hyundai. Although the Tucson can in no way be said to be inferior to the CR-V, be it performance or technology, consumers have very strong perceptions about Honda products, compared to Hyundai, in such segments."

Agrees Tilak Swarup, research editor, Supplier Business, a UK-based auto-component magazine, "Most consumers still don't look upon the Tucson and other Hyundai offerings in higher segments as premium products."

Compared to the CR-V, which sold 1,518 units between April and December 2005, the Tucson sold 1,020 units. While the industry doesn't find the numbers impressive, Hyundai says it is satisfied with Tucson's performance.

Says Shukla, "The Tucson is a completely built-up vehicle. We sell as many as we import and there are always orders for the Tucson. The Terracan and Tucson are low-volume cars; more than profits, their presence largely helps in giving a brand equity to the mother brand."

The other key reason why the Tucson hasn't been a branding success, analysts point out, has been the low-key advertising, which was limited to a few ads (both print and TV) after the launch. Points out auto analyst Tutu Dhawan, "The brand recall for an average consumer is very low.

Many haven't heard at all about the Tucson. Even the ad, which talks about the spirit of adventure around an American Indian theme in Tucson, in Arizona, doesn't appeal to the Indian consumer." Defends Shukla, "Since the Tucson is a low-volume car we are not into mass advertising. We do direct marketing and one-to-one communication focused on target customers."

The bottomline for the Tucson: Hyundai needs to rev up its marketing and advertising for the brand, and perhaps as Swarup points out, leverage the diesel advantage by selling the Tucson at lower price-points than the CR-V.