Top GM Korea Marketer Takes Aim at Kia, Hyundai

BUPYEONG, South Korea – The Chevrolet brand will make it possible for General Motors Korea to surpass Kia and take hold as the No.2 auto maker in Korea, predicts one of the executives tasked with making it happen.

Kyungee “Jennifer” Lee, GM Korea managing director-marketing functions, says it may take years, but that is the auto maker’s firm goal.

It is her job to draw Korean car buyers to Chevrolet, the nameplate shared by all of GM Korea’s mass-produced vehicles with the exception of the Alpheon luxury car sold under its own label.

“Before the acquisition by General Motors, Daewoo was a prestigious brand, but during the Asian economic crisis of 1997 the brand and the corporate name got badly damaged and never got back to their previous reputation.”

Consequently, she says, while exports soared following the GM acquisition, domestic sales dropped far below historic levels and stayed flat. Even newcomer Renault Samsung, which launched at the height of the crisis with only the SM5 model, pushed ahead and eventually claimed third place behind Hyundai and Kia.

“Today the Korean market is dominated by Hyundai and Kia, which hold an 80% share, but we’ll gradually take on Hyundai, itself,” Lee tells WardsAuto in an interview at GM Korea headquarters in Bupyeong. “That is our eventual goal as a brand.

“We will eventually rise to No.2 position. We are building our brand, building our business. It takes a long time, but if we keep doing things in the right way we will eventually get there.”

Lee acknowledges there is a huge gap to close with Kia, which boasted 33% domestic market share in 2010, with 408,916 units sold compared with GM Korea’s 8.1% share, with only 116,293 deliveries.

This year, Kia has done even better, garnering 34% of the domestic market with 408,916 units sold through October, while GM Korea had an 8.8% share on deliveries of 116,293. However, GM Korea sales are growing rapidly and the auto maker will finish the year with a double-digit market share, according to company projections.

“Narrowing the gap will be a big achievement,” Lee notes. “It involves a lot – the whole combination of things, including long-term investment from the corporation. GM is serious about this market.

“That’s why GM has spent and will continue to spend to provide more cars, better cars and better services than the competition.”

Lee does not provide investment figures, including huge advertising and promotional numbers.

She says that since all vehicles adopted the Chevrolet nameplate in March, domestic sales have improved 27% year-over-year.

GM Korea launched eight new vehicles this year, including six in the March-November period, but Lee thinks the sales boost mostly is the result of the switch to the Chevrolet brand. “Without the Chevrolet brand I don’t think we would have achieved that,” she says.

But she notes it hasn’t been a matter of simply re-badging existing vehicles as Chevrolets. “The brand really matters to the customer.”

After earning a master’s degree in business administration at Harvard, the Korea-born Lee joined GM Korea four years ago and has spent three years drafting the marketing plan for re-launching the auto maker as GM Korea and its vehicle lineup as Chevrolets.

To properly position and win acceptance for the brand requires complex investments in product, service programs, dealership showrooms and service departments, and in establishing rapport with the Korean consumer base, she says.

“Chevrolet is a dynamic, youth-minded brand, and we are trying to offer consumers more choices than Hyundai or Kia – more dynamic vehicles.”

The marque’s initial rollout was done with panache, first explaining how to pronounce “Chevrolet.” The average Korean would say “Shivolay” with rapid enunciation and in a dialect sounding nothing like the English pronunciation.

“So we started that pronunciation campaign with digital media and with outdoor displays.”

Now, she says, the English-enunciated word “Chevrolet” is part of the Korean vernacular.

“From there, we started to build up the strong points of the brand, the performance and quality fundamentals, and Chevrolet’s long history,” Lee says. “There is heritage in the brand but also a special youthfulness; 100 years old, yes, but a global brand with modern, youthful dynamics.

“The Hyundai and Kia brands are more mature in the Korean market, but they are less dynamic.”

Intense promotion of the brand through all advertising venues, including social media, has been linked to substantial spending on upgrading dealerships.

“It has been a huge investment. I cannot share the money amount, (but) the change to Chevrolet-branded showrooms is phenomenal. It’s seen in terms of the whole environment: bright, modern, welcoming.

“Before we launched this program, the dealerships were small, cramped, often with only two or three vehicles displayed. Now the size of the stores has increased and dealers display all different sizes of vehicles, with seven or more on the floor.”

She says conversion of GM Korea’s 300 dealerships is 80% complete. Of the more than 240 that have been converted, she says at least half either have expanded or relocated to new, high-traffic locations.

Lee believes outstanding service and communicating the auto maker’s service policy also are helping win over customers.

“Our Chevy Care program provides identical warranty and service across every Chevrolet car model, and no other company does that.

“Our 5-year, 50,000-mile (80,000-km) bumper-to-bumper warranty, with three years of free oil change and maintenance and seven years of roadside assistance, is huge in building confidence in the brand.”

She thinks the Chevrolet conquest campaign will get a big lift next year, when the Corvette arrives on the Korean market. “In terms of volume, it’s nothing huge, but it’s a hugely iconic brand.

“Every guy has a dream of driving this car. It will help the brand go to the next level. Hyundai and Kia do not have anything that can match it.”

She says the imported Camaro, which launched in Korea this year, will continue to bolster the brand’s image when offered alongside the Corvette.

A Camaro done up in bumble-bee yellow and black has been a showstopper wherever it has appeared, including the Seoul and Shanghai auto shows, Lee notes.

The just-launched, Korea-built Malibu puts GM Korea firmly in the midsize-car market, although it’s too early to talk about sales performance. “The market now is in a downturn, but this is the strongest segment in Korea and we’re sure we’ll reach our sales targets in it,” Lee says.

The Malibu is taking on the Kia K5, the sales leader in the hotly contested segment, as well as the Hyundai Sonata and Renault Samsung SM5.

GM Korea couldn’t field a better vehicle in this market than the Malibu, which embodies the brand’s style, quality and dependability, Lee maintains. As with the Corvette and Camaro, the Malibu’s image has a ripple effect that spreads to the rest of the auto maker’s portfolio.

The Malibu replaces the homegrown Tosca sedan, which did not do well in the domestic market.

Some Chevrolet brands will be slightly modified next year, but no new products are coming on stream. However, Lee says GM Korea has new product waiting in its arsenal, including an entirely new small car. “We are discussing when to launch; when is the right time.”

Lee does not state the auto maker’s position on the pending U.S.-Korea Free Trade Agreement, but she thinks ratification by the Korean government has a long way to go.

Supporting that belief was debate that led to physical fighting in the National Assembly on the day of this interview.

“The consumers will see some benefits” if the agreement is ratified, Lee says. “They think imported cars are overpriced because of the tariff structure and they expect more reasonable prices.”

For GM Korea, “Our Corvette and Camaro will benefit from this and there will be some improvement in volume,” she says.

GM Korea’s exports focus mainly on European and other markets, including China, to which the auto maker exports huge volumes of complete-knocked-down vehicles. Less significant are exports to the U.S.; Lee notes GM Korea’s leading export vehicle to North America, the Chevrolet Aveo, now is being produced in Orion Township, MI, as the Chevrolet Sonic.

Lee reiterates GM Korea has a determined growth and conquest plan and has the parent company’s full support, financial and otherwise.

But she cautions outside factors cannot be overlooked – the dynamics of global economics, the current turmoil in European markets, stability in financial markets and potential returns on investment.

“You never know,” Lee acknowledges. But if things go right, GM Korea can overtake Kia and square off against Hyundai for market leadership, she says.