Interestingly, the new "modern premium," while initially created
by Innocean, could be carried out by another shop. Mr. Cho said
that while the in-house legacy agency will handle the "first wave"
early in 2012, "for the second campaign we haven't made any
decisions." Hyundai "may be able to seek partnership opportunities
with another agency," he added.
It's a striking statement coming from Korean headquarters, given
that Innocean is part of the Hyundai conglomerate and that the
automaker's North American chief, John Krafcik, has said that using
Innocean is pretty much a mandate from the Seoul C-suite.
The move comes when Hyundai is on a high. In recent years, the
company has hammered a value message with its "Assurance"
powertrain warranty, a trade-in value guarantee and a job-loss
protection plan that made it a friend of working people.
According to Automotive News Data Center, the Hyundai division
alone accounted for 645,691 units sold in 2011, up 20% from 2010.
The brand has had stellar success with its "fluidic sculpture"
models, the Elantra and Sonata; a racy hit with the sporty,
three-door Veloster; and a performance entry in the new Genesis.
It's also preparing a fully revised bread-and-butter model, the
Santa Fe SUV, for April.
But Mr. Cho said despite the Hyundai group's growth -- some of
it at the expense of the Japanese, affected by last year's tsunami
and earthquake -- he hears footsteps. "The Chinese, the Indian
players, will be a threat to us in three years, in five years," he
said. "We can still make a lot of improvements."
"Modern premium is a very serious subject around here," Mr.
Sanfilippo said. "We're not the only [automaker] that wants to
succeed up-market. That's where the margins are."
Hyundai has been leaning in this direction for several years. In
late 2010 it fired its first volley into luxury car sweeps with the
$60,000 Equus, designed to compete with Lexus and Acura and ruffle
feathers at BMW. Its tagline was "New Thinking, New Possibilities."
Mr. Cho insists that the car met sales targets, though according to
Automotive News data, only 3,193 models were sold in the U.S. last
The company also pursued an attainable-luxury position for
Sonata last year with a TV spot that showed cops eating caviar on
their squad car and kids playing with a Louis Vuitton basketball.
(That image got Hyundai in hot water with the design group for
using the logo without permission.)
But the new push is more ambitious in trying to encompass the
"It's a delicate dance they're doing," said Peter DeLorenzo, an
industry maven who writes The Autoextremist blog. "The Koreans are
always hungry to be somewhere they're not, and this is where they
get in trouble. The Equus is a nice car, but it hasn't made
substantial inroads in that market. The brand's consideration level
is high, and they should try to maintain that."
A reinvention wouldn't be Hyundai's first reversal of fortune.
Under Joel Ewanick, marketing chief from 2006 to 2010, and Goodby Silverstein
& Partners, the brand launched its "Think About It
"campaign, which stressed Hyundai's price, fuel economy and long
Recently hired VP-Marketing Steve Shannon is overseeing spending
now. The Hyundai brand was supported with $233.1 million in
measured media from January through October of last year, according
to Kantar Media. Hyundai Motor
America bought two spots during NBC's coming Super Bowl broadcast,
as well as a 60-second commercial before the kickoff. Speculation
is that at least one of the ads will focus on Hyundai's workforce