Why Hyundai, Subaru are rising in this bad economy

It’s easy to look around and see nothing but bad news for the auto industry, and in most cases, that perception is right on. Sales fell 55% at Chrysler and 49% at GM, 40% at Ford, 32% at Toyota, 30% at Nissan and 28% at Honda for the month of January. But there were two bright spots amid the turmoil that has crippled this business over the last 12 to 15 months: Hyundai and Subaru both posted gains in January (14% and 8%, respectively). Here’s my take on how this happened:
Hyundai created the perfect program, and actually put marketing resources towards it
In January, Hyundai launched its one-of-a-kind “Assurance” program, which allows consumers who have lost their jobs to return their newly purchased vehicle with no effect on their credit. For some consumers, the recession and risk to their job may have been the only factor in not purchasing a new car during the last two years. There are people out there that are both willing and able to buy a car. There are people who need to buy a car or know that moment is coming – we all know how quickly a car can become more trouble (and more expense) than it’s worth. But there are also a whole lot of people scared of losing their jobs. This program clearly speaks to that concern, and Hyundai’s reputation for following up on its promises helps remove the mental barriers that are stopping consumers from becoming Hyundai customers. It’s a brilliant tactic and received strong marketing support. The program worked so well in fact, that Hyundai launched “Assurance Plus” this past Sunday (Feb. 22). Under this new program, which is currently slated to run through the end of April, Hyundai is offering to cover three months of car payments while the buyer looks for a new job, and then allow the car to be returned if circumstances don’t improve.
In the interest of full disclosure, I currently drive a Hyundai and have about 22 months of payments left. I seriously considered trading it in, not only to get the newest model (the Genesis Coupe if you were wondering), but also for that peace of mind. That’s part of the reason I wanted to write about this.
Subaru continued to focus on its core values, and let their marketing speak to that
Over the last three years, Subaru (which has headquarters just outside of Philadelphia) has adjusted their approach and the specific marketing campaigns that support it. In 2006, they launched a new branding campaign based on the phrase “It’s What Makes a Subaru, a Subaru.” According to a recent interview that featured Subaru’s CMO as well as their Director of Marketing, that campaign focused first on vehicle attributes and then on the brand’s core values: active driving, engineering excellence, environmentalism and safety. They also altered the content of their ads, starting a new messaging strategy called “beaconing” that illustrates the brand’s values by talking about owners. In layman’s terms, they use real stories to sell product by helping people feel happy and relate to what they see. Subaru continued this deep focus on the values and beliefs of its customers by also launching the “Share The Love” campaign across the country, giving consumers the opportunity to select one of five charities to receive a $250 donation following the purchase or lease of a new vehicle. In addition, their local dealers were allowed to create innovative programs like Carter Subaru’s “On The Road to Carbon Neutral,” which planted one tree for every test drive in the Seattle area (more than 11,000 trees total, with support from Entercom’s Seattle cluster of radio stations).
Hyundai and Subaru already know that their marketing is working. And they are proving it. So what are you doing?
A few follow up resources:

  • Advertising Age has a good story about the automotive industry in this weeks issue. It talks about the shifting focus, happening right now. An excerpt: “They will be marketing fewer brands — and marketing them longer, beyond the launch phase; there will be more emphasis on fuel efficiency in messaging and product…” Read more here.
  • If you’re interested, you can read the full story on the results listed at the beginning of this post right here, courtesy of the New York Times.