Hyundai made one of the more significant splashes of the Los Angeles Auto Show last month when the Korean car manufacturer introduced a subscription-based ownership model essentially made for millennials.
Billed as Ioniq Unlimited, the innovative, stress-free ownership concept is designed to market Hyundai’s Ioniq line of zero-emission, eco-focused vehicles by offering a negotiation-free, single-payment method.
How does the internet-based buying experience work, exactly? Ioniq shoppers will be able to select one fixed payment that includes unlimited mileage, electric charging costs, scheduled maintenance, wear items and all typical purchase fees such as registration and down payments. They then receive a quote to take to the dealer to complete the transaction. The pilot program will launch in California early next year. The price points consumers can expect to pay have not yet been announced.
The transaction-simple project will be paired with a marketing partnership with WaiveCar to give consumers a chance to drive Ioniq cars on-demand for two hours at no charge. The only catch is that the cars are wrapped in ads and include a roof-mounted digital display that generates ad revenue to offset costs.
Hyundai expects millennials to be their primary buyers in 2017, and their new strategy with Ioniq Unlimited and alternative-propulsion vehicles completely aligns the company with their expectations. According to an April report from Bankrate, among all age groups that were surveyed, millennials are most likely to purchase a vehicle in the next 12 months. The most populous generation in the US is radically changing the go-to market approach for car companies.
Dean Evans, chief marketing officer for Hyundai Motor America, joined [a]listdaily to thoroughly detail the new direction of which Hyundai is driving its brand.
At the LA Auto Show, Hyundai’s message about no longer being just about cars was rather clear. How are you democratizing new technology while staying at the intersection between health and mobility?
The emergence of telematics and connected cars have converged the automotive and technology industries. Today, it’s to the point that automobiles, connectivity and technology are intrinsically linked and interchangeable moving parts at motor shows and consumer electronics events everywhere. With that shift, our mission has now moved well beyond providing products to transport people from Point A to Point B. We no longer just build vehicles, we’re in the business of providing consumer mobility. And we’re committed to doing that ‘Better’ on behalf of our customers.
‘Mobility’ can mean many things, depending on who you ask. For Hyundai, mobility isn’t just about cars and trucks. It’s about how we move, communicate and interact with the world around us. In Hyundai’s vision of the future, mobility is environmentally friendly, it’s infinitely connected, it’s easy to access, and it’s safe. The initiatives we’ve been advancing on our own for some time are absolutely helping to make that vision a reality.
Our Blue Link telematics system, our integration of smartwatch controls and Amazon Alexa, and rapid adoption of Android Auto and Apple Car Play interfaces have put us at the forefront of providing products that can not only exceed the automotive needs for owners, but actually improve their daily lives. The newest tangible element of Hyundai’s mobility vision is our electrified Ioniq lineup. Ioniq is much larger and broader in scale than just a fully dedicated platform offering three distinct propulsion systems. It really serves as a linchpin for all our future mobility initiatives. We call it ‘Project Ioniq’ because it’s more than just a great new product—it’s a way to concentrate thought leadership and incubate these great ideas and bring them to life.
The Ioniq Unlimited sounds like it is Hyundai’s way to get millennials to subscribe to cars. What are the strategy and initiatives for the novel-alternative model work? And how are you trying to challenge convention?
We are challenging convention by listening to our customers and offering new ways for our customers, including millennials, to engage with and experience our brand. We’re excited to offer Ioniq Unlimited as an innovative, worry-free means of clean, zero-emission vehicle ownership with our new Ioniq Electric vehicle. This new ownership experience adds to the satisfaction of driving a no-compromise, clean vehicle with unlimited mileage and zero hidden costs. It was time to make clean vehicle ownership easy for everyone.
How do you see subscription model services further developing in the future? Do you think there is a sustainable appetite in the space among consumers?
The subscription model will be simplified and better meet the needs of our customers. Our brand is focused on ‘Better’—meaning we focus on improving the lives of customers through better thinking and better products. Hyundai is adding value to that experience, by creating a better ownership model with the Ioniq Unlimited plan. The Ioniq Unlimited plan gives customers a different path to emission-free mobility while eliminating the confusion of purchasing or leasing a vehicle.
Traditional add-ons like registration, doc fees and other miscellaneous expenses are included, so the price you see is the price you pay. What differentiates the Ioniq Unlimited ownership experience from a traditional purchase or lease is that it covers all vehicle ownership and operating costs. In one simple monthly payment, subscribers get a ‘no compromise’ EV with America’s best warranty, and lifetime battery warranty. To make purchasing an Ioniq Unlimited subscription even easier, we’re also offering a unique online buying experience. Customers can select a vehicle from their preferred dealer’s inventory, choose the term, and then simply go to the dealership to complete the purchase. At the dealership, there’s no haggling or hassle. It’s a completely transparent, stress-free and an entirely ‘Better’ purchase experience.
What is the toughest task when it comes to marketing electric, hybrid and plug-in vehicles? What’s the message you want to convey to millennial consumers?
Currently, there are a large group of consumers that consider purchasing an electric, hybrid or plug-in vehicle, but ultimately choose a traditional gas engine car. Our biggest challenge is convincing these ‘fence sitters’ that alternative-powered vehicles are right for them. We’ve found that one of the main reasons they don’t select an electric, hybrid or plug-in is because of customer anxiety over the unknown when it comes to the technology and ownership experience. Customers are limited many times by either lack of understanding in terms of the lease, cost of charging, cost of ownership, maintenance and miles limitations of these newer technologies. We’ve listened to the customer and are addressing these challenges with the Ioniq Unlimited program. We simplify all the challenges, we answer their questions for ease and joy of ownership. We want to show our customers that we listened to their concerns and this is our solution.
How are you going to get the word out about subscription model? Is influencer marketing a strategy you see working here? Has Hyundai had success with influencers in the past?
It’s too soon to discuss the specifics of our marketing plan, but we are looking at various ways of communicating this exciting new ownership model to customers. Influencers have been and will continue to be an important part of the way we market our cars today. They have a great ability to reach audiences and tell stories in a way that is authentic to their fans.
Why is it critical to reach consumers interested in Ioniq in experiential ways with partnerships like? How will you measure the success of this specific activation?
Our partnership with WaiveCar gives consumers the ability to drive Ioniq EVs on-demand for two hours at no charge. This is a stress-free, commitment-free way for potential customers to give Ioniq a try. We feel these types of opportunities for potential customers open up additional paths for customers to feel comfortable and informed before making a purchase decision.
What kind of presence will you have at CES? What can we expect?
At CES in January, we’re demoing a fully autonomous Ioniq concept on the neon-and-sunlit boulevards of Las Vegas and will also be demonstrating Hyundai Exoskeletons. You will be able to see our robotic exoskeletons that enable paraplegics to walk again, empower the military to run up to 12 kilometers per hour with assistive joint torques, and give factory workers the ability to lift up to eight times what they normally can with ease. At our press conference, we will show mobility and eco-friendly transportation—developed both independently and collaboratively with industry-leading partners demonstrating future technologies in connectivity, autonomous driving, health care and personal. The exoskeletons will be featured along with 12 additional tech items spanning the connected home, healthcare and autonomous vehicles at the Hyundai booth.
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