DETROIT -- Hyundai Motor America is earmarking 20 percent of its media advertising spending this year to launch the Azera -- its first foray into the premium market.
To help pay for the launch of the mid-sized sedan, Hyundai officials say they are boosting the company's media spending by as much as 40 percent in 2006.
"We know we have a job to do with a new name, a new product, in a new segment for us," said Michelle Cervantez, Hyundai's vice president of marketing.
"We want to make sure consumers understand that this is a Hyundai you may not have experienced in the past," Cervantez told Automotive News at last month's Detroit auto show.
Cervantez would not disclose the cost of the Azera launch. Hyundai division spent $232.2 million to advertise in U.S. media in the first half of 2005, according to TNS Media Intelligence.
The Azera went on sale late last year. A national TV advertising campaign for the car, called "Ripples," began this month.
The base-model Azera lists for $24,995, including shipping. Cervantez says Hyundai seeks to gain conquest sales for the Azera from such cars as the Ford Five Hundred and Nissan Maxima.
Other sales leaders in the mid-range premium segment are the Chrysler 300, Buick LaCrosse, Dodge Magnum and Volkswagen Passat. Sales in the segment rose by 51.4 percent last year over 2004.
Bring it on
Hyundai dealers say they are looking forward to the Azera ad campaign.
"Our expectations are high," says Jimmy Ellis, of Jim Ellis Hyundai of Atlanta. "We have sold a good many more (Azeras) than we did when (Hyundai) launched the XG350. That came with a lot of fanfare and a lot of noise. But it has taken the market a while to adjust to the idea of an expensive Hyundai."
Says Bill Drew, of Drew Ford-Volkswagen-Hyundai-Isuzu in La Mesa, Calif.: "People have to know about the vehicle first. That will take some time. It will get us into the game and into the upper-end arena we have been trying to get into."
The Azera TV spots will run on broadcast networks and on such cable networks as Fox News Channel, CNBC, Travel Channel, National Geographic Channel and Fine Living.
The print campaign will appear in March editions of such magazines as Golf Digest, SmartMoney, Newsweek, Forbes and The New Yorker.
Industry analysts say Hyundai, a brand known for value, faces an uphill climb in establishing the Azera in the premium segment.
"The Azera may be the most successful automobile to ever roll out of an assembly plant, but I am not going to put 50 cents on it being successful," says Michael Bernacchi, a marketing professor at the University of Detroit Mercy. "Developing a brand in the upscale range is very difficult."
Consumers who buy costlier vehicles seek the status of an upscale brand, Bernacchi says. Hyundai, he says, does not connote status.
Jesse Toprak, an analyst for the automotive Web site Edmunds.com, says Hyundai has a history of loading up its vehicles and offering them at bargain prices.
"If they essentially offer people $40,000 worth of car for less than $30,000, they could be successful," Toprak says. "That's how they went head-to-head with Toyota in the small-car segment."
Hyundai's Cervantez says the company is eager to chip away at its bargain image with the Azera campaign.
"We can't have any patience," Cervantez says. "I think our patience is done. We need to get out there."
You may e-mail Greg Bowens at [email protected]