Hyundai Tries to Modernize Car Buying in the Amazon Era

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In the midst of the 2009 recession, Hyundai came forward with a unique promise: Lose your job and you can return your car and get your money back. Today, as the Korean automaker looks to overcome a sales slump, it is offering several new pledges to U.S. buyers aimed at responding to today's consumer demands, like transparency and convenience, that have accelerated in the Amazon era.

The program, called "Shopper Assurance," includes a three-day money back offer, flexible test drives in which cars are delivered directly to consumers, more transparent pricing posted on dealer websites and streamlined purchasing in which buyers can complete paperwork online, rather than at dealers.

It sounds like pretty basic stuff, but the fact that Hyundai can make a big deal out of it shows how outdated many aspects of car buying look compared with other kinds of shopping. Then again, Hyundai in particular takes a long time to complete a sale.

"We are one of the dead-last brands with longest sales transaction times," says Dean Evans, chief marketing officer at Hyundai Motor America. "We don't like that."

The new program also comes as Hyundai struggles to make sales gains. Hyundai's sales were down 15.1% for the first nine months of the year, according to Automotive News.

Mark Wakefield, global co-head of automotive and industrial for global consulting firm AlixPartners, calls it an anachronism in "today's 'Amazon world'" that it takes around four hours at a dealership to buy a vehicle and drive away—"about the time it takes to fly all the way from New York to California or do your taxes."

"In general, automakers and some dealers need to do what they can to cut that about one hour," Wakefield says.

People want to spend less time in dealerships, says Michelle Krebs, a senior analyst for AutoTrader. "The longer they are there, the less satisfied they become," she says.

One ad in a campaign to promote Hyundai's new effort equates traditional car-buying with smoking on airplanes and using baby oil for suntan lotion. Another features a young buyer named Cole who is described as "not a big fan of all the time and effort it takes to shop for a car."

The flexible test drive offering allows consumers to use an app or website to schedule a test drive at the place of their choosing, like at home, the office or a coffee shop. Hyundai's money-back guarantee is contingent on a dealer inspection and fewer than 300 miles driven since purchase.

It doesn't make sense that "you can buy shoes and, boom, take them back," but not bring a car back to the dealer, Evans says. (Money-back offers for cars have some precedent, however: CarMax offers a five-day money back guarantee, and General Motors in 2012 offered a 60-day money back guarantee on Chevrolet models, following a similar program the automaker offered in 2009.)

The "Shopper Assurance" label borrows from the "Assurance" moniker Hyundai introduced in January 2009 during the recession. That program, considered bold at the time, allowed buyers to to walk away from financing obligations within the first year of buying a car if they experienced certain life events, like losing their job. The job-loss protection guarantee was eliminated in 2011 after the economy improved.

Evans blames some of Hyundai's recent sales declines on a new strategy cutting back fleet sales, including to rental car companies. Fleet sales now account for about 10% of sales, down from roughly 30% this time last year, he says. Hyundai also introduced its 2018 models earlier than some of its competitors, meaning the vehicles were competing against 2017 models that carried generous discounts and incentives, he adds. Japanese car brands "clobbered our you-know-whats with our [2018 models] sitting there with half the incentives," he says.

The campaign and program will start regionally this year in Miami, Orlando, Dallas and Houston, before going national in 2018. Innocean is the agency behind the campaign.

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