The Big 3 may have to get even more inventive if they are going to compete with Toyota, Honda and now Hyundai.
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Jun 30, 2009, 3:29 p.m. EST
Hyundai has another winner with gas-capping deal
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By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) -- If this car-selling gig doesn't work out, executives at Hyundai might want to consider careers in psychology.
The Korean automaker has played masterfully on the fears of its customers during some of the darkest days the industry has ever seen, and its efforts have paid off big.
In the company's latest effort to drive sales, Hyundai on Tuesday offered new-car buyers a chance to lock in $1.49 per gallon gas for an entire year. It's not a new concept and the savings may not be all that substantial, but the timing is right.
Summer is here and gas has been on the move -- currently averaging $2.63 a gallon, according to AAA, up from $2.50 a gallon just last month.
A recent surge in crude prices also has grabbed headlines after stepped-up attacks on Nigerian oil facilities sparked supply concerns.
Hyundai said that 40% of potential buyers are staying out of the market due to the prospects of rising gas prices. It's hard to question Hyundai's data team, considering the company's track record at laying to rest customer worries.
With unemployment numbers surging earlier this year, Hyundai launched a plan to cover new-car payments if the buyer loses his or her job. The program helped buoy Hyundai's sales and triggered similar moves from both Ford Motor Co. and General Motors.
The proof is in the numbers. Hyundai's recent monthly sales comparisons have been at or near the top of the heap while its share of the key U.S. market has jumped to 4.3% so far this year, up from 2.8% in 2008, according to Autodata.
Still, this isn't the first time a major automaker has capped gas prices.
Chrysler was one of many to offer gas incentives in recent years to combat the surging price of fuel. The automaker launched "Let's Refuel America" in 2008 -- a program that locked in gas at $2.99 a gallon for three years.
The concept was mostly panned by critics and customers who didn't see the savings reach that of other incentives offered by the car maker.
Moreover, the plan was cobbled together at the peak of the green-car buzz, so it was also slammed as a misguided attempt at keeping Americans hooked on gas-guzzling dinosaurs.
Yet Chrysler, running out of options and needing to move product, extended the deal in what turned out to be one of many last-ditch attempts to avoid bankruptcy.
Hyundai's straits are not nearly as dire. Its management has been able to turn the auto industry's depression into a showcase for its more-thrifty lineup, avoiding suspicion that it's trying to take the sting out of owning an archaic fuel hog.
Shawn Langlois is a reporter for MarketWatch in San Francisco.
