Hyundai’s strategy is to sell more cars for less than the competition. With the rest of the auto industry in free fall being off 21% from the previous year, Hyundai’s U.S. sales had increased 8%. Michael Brown, Vice President of Atlantic Hyundai’s parent company, a dealership network, indicates that Hyundai has the hot hand with an aim to dominate the marketplace. John Kraftchick, President and CEO of Hyundai Motor American, is interviewed saying that Hyundai’s chairman initiated the move to achieve the highest level of quality in the industry in 5 years. With a quantum leap in quality, Hyundai has new models that are, now, well-equipped, fuel efficient, and stylish. James Bell, analyst for the auto industry’s Kelly Blue Book, reflects upon the first 1986 Hyundai to enter the marketplace. He concludes that Hyundai retrenched and came back stronger by curing their reliability and durability concerns with longer warranties and a blitz of ads that gained consumer public attention. The Toyota downfall is an advantage for Hyundai but Hyundai, too, experienced its own recalls. The Vice President for Hyundai Motor America concludes with their concerns that Hyundai may experience the Toyota woes but it has been a wakeup call. John Kraftchick provides a sneak peek of the newest Hyundai flagship automobile that will compete with the BMW 7 Series, Mercedes Benz S Class, Lexus LS, and those cars that cost $70,000 to over $100,000 dollars. He concurs that Hyundai stands for something different rather than price. While Hyundai remains reactive, they are concerned about vehicles from India, Vietnam, China and other upstarts just like Hyundai once was.
- Describe Hyundai’s competitive behavior.
- What kind of competitive dynamics might you expect from Hyundai and other automakers?
- Is Hyundai involved in multimarket competition? Why or why not?
- What impact will market commonality have on competitive responses in the auto industry?
- Can Hyundai be identified as a late mover? If so, why? And what consequences should they be knowledgeable of?