In the brutal competition among car manufacturers to take market share from one another in the stagnant U.S. market, South Korea’s Hyundai has stepped up its game. If its new system to find buyers works, other car companies may have to follow its lead.
Hyundai has launched an initiative called “Shopper Assurance.” Its hallmarks include “transparent pricing,” so the buyers know exactly what they will pay, as well as the chance for cars to be delivered to people’s homes for a test drive, the chance to handle most buying paperwork online, and a three-day return policy if buyers find they don’t like their new cars.
Several parts of this plan already exist with other retailers, but not put together as a package. The notion of transparent pricing is very old and has not shown any promise to bring in customers. As a matter of fact, non-transparent pricing is sometimes a signal that a dealer is open to negotiation.
The convenience aspect of test driving is usually reserved for luxury cars. Buyers of expensive vehicles expect more hand-holding. When someone pays north of $70,000 for a vehicle, that may be expected. This is particularly true because the luxury car market is as crowded as any other with competitors from Germany, Japan and the United States.
The most attractive part of the Hyundai deal is the chance to return a car. It also may be the most risky. Three-day-old cars may be harder for dealers to sell. They will have to explain why “almost-new cars” are in their inventories.
As it announced the plan, Hyundai management wrote:
We know buying a new car hasn’t always been as smooth a process as we’d all like. We hear you. So we’re happy to introduce Hyundai Shopper Assurance. Every step simplified for your convenience, including presenting online pricing right up front. It’s a whole new car buying experience designed to save you time and help make buying your new car as enjoyable as driving it.
The plan could work, even if some of its aspects are not new. The competition is no doubt watching to see if they will have to match what Hyundai will do.