Y. I. Kim

Executive Vice PresidentHyundai & Kia Corp Marketing / Product Planning Div.

Global Brand Strategy of Global Brand Strategy of HYUNDAI Motor CompanyHYUNDAI Motor CompanyGlobal Brand Strategy of Global Brand Strategy of HYUNDAI Motor CompanyHYUNDAI Motor Company

August, 2006

Contents

Hyundai Hyundai

Brand Scheme Brand Scheme

Brand Brand 1. What is a Brand?

2. Why? Brand

3. Brand, What for?

4. Brand Perception

5. Brand Building

1. What is a Brand?

2. Why? Brand

3. Brand, What for?

4. Brand Perception

5. Brand Building

1. Sales Performance

2. Global Production and R&D Network

3. Product Competitiveness

4. Outside Evaluations

1. Sales Performance

2. Global Production and R&D Network

3. Product Competitiveness

4. Outside Evaluations

■ ■ BRANDBRAND

1. What Is a Brand?

2. Why? Brand

3. Brand, What for?

4. Brand Perception

5. Brand Building

1. What Is A Brand?

=

Consumer

Hearts and minds

A “network of associations”

Reside in the customer’s mind not in your company

Magical

Crowds

Fun

Florida

Expensive

Mickey

Family

Mulan

Ultimate Vacation

KidsWholesome

A Brand is the sum of thoughts and feelings evoked by a Product or Service about what it means and does

2. Why? Brand

Provide an assurance of quality and consistency as well as simplify decision-making Deliver the product usage experience

Last Food for50 Miles

3. Brand, What for?

Modern

Sporty

Young

Dynamic For Self Driver

StylishSafe

TraditionalStatus

Chauffeur

Classic

When you think about BMW and Mercedes, what image does come to your mind?

World-classQuality

ExpensiveCar

German

They are both cars(products), German, world-class quality and expensive -

both get you from point A to point B, but…

4. Brand Perception?

In my childhood..

Dream (Goal Setting)(to become a successful and

respected business man)

Strategy

(Education, Friendship, etc.)

Efforts to Fulfill

Achievement• Appearance - DI• Character (Personality) - PI• Image / Mind / Knowledge - BI

Today

Perception

‘He is a really cool, excellent and refined

business man…. He is my role model.’

No Gap

5. Brand Building

Present

“What we are”

FuturePast

Strategy

“What do we want to be?”

Strategy

“What do we want to be?”

How have we been?

How have we been?

From the view of global trend, corporate value creation

Analysis

Goal Setting

Achievement

1. Sales Performance

2. Global Production and R&D Network

3. Product Competitiveness

4. Outside Evaluations

■ ■ HYUNDAIHYUNDAI

Global Insight, Mar., 2006

1. Sales Performance

1,034

1,721

1,081

1,746

1,205

2,025

1,431

2,298

1,494

2,512

2002 2003 2004 2005 2006

HYUNDAI

KIA

2,755 2,8273,230

3,729

CAGR : 11%(Compound Annual Growth Rate)

(In 000) Global Sales of Hyundai-Kia Automotive Group

4,005

< 2005 Global sales ranking >(in ‘000)

350M/S 2.2%

234M/S 7.9%

571M/S 50.0%

455M/S 2.7%

Regional Sales in 2005

1. Sales Performance

Group Sales

1 GM 8,730,808

2 TOYOTA 7,891,597

3 FORD 6,476,910

4 RENAULT 5,881,205

5 VW GROUP 5,055,910

6DAIMLER-CHRYSLER

4,339,029

7HYUNDAI-KIA

3,728,642

8 HONDA 3,361,803

9 PSA 3,209,109

10 SUZUKI 1,941,103

USA W.Europe China

Korea

252M/S 18.2%

India

Global Insight, Mar., 2006

2. Global Production and R&D NetworkNote 1

Note 2

: R&D Network

: Production NetworkEurope Technical CTR

Japan R&D CTR

California R&D CTR

America Technical CTR

Mojave Proving Ground

HMMA, USA

SOP: FY2005 Ownership:100%

SOP: FY2005 Ownership:100%

BHMC, China

SOP: FY2002 Ownership: JV 50%

SOP: FY2002 Ownership: JV 50%

HMI, India

SOP: FY1998 Ownership : 100%

SOP: FY1998 Ownership : 100%HAOS, Turkey

SOP: FY1997 Ownership: JV 55%

SOP: FY1997 Ownership: JV 55%

HMMC, Czech

SOP: FY2008 Ownership : 100%

SOP: FY2008 Ownership : 100%

147 133 133 119 118 124

110

102102

156

192

143

121111

121 104

105

106

2001 2002 2003 2004 2005 2006

Industry Average

IQS (Initial Quality Study)

3. Product Competitiveness

IQS data, J.D. Power, 2001-2006

IQS is the measurement of Problems Per 100 Vehicles (PP100) after 90 days of ownership. The less the index is, the better the quality is.

Over the past five years HYUNDAI has improved in IQS ranking at double the industry average.

“Man bites dog, The earth is flat. HYUNDAI builds better quality cars

than Toyota” (excerpted from Automotive News, Apr.,2004)

Non-luxury Average

3. Product Competitiveness

APEAL data, J.D Power, 2002-2006

APEAL measures customer perceptions on the design, content, layout and performance of their new vehicles. Higher index represents better perceptions.

APEAL (Automotive Performance Execution And Layout)

838 844 845 849 853

853

858

852

832

847836

853

853

857852

2002 2003 2004 2005 2006

4. Outside Evaluations (from Media)

Forbes (April 25, 2005)

For U.S. automakers HYUNDAI’s

rise is like a rerun of bad movie.

TIME ASIA (April 25, 2005)

HYUNDAI is “putting pressure on

everybody.” -Auto Analyst, UBS

HYUNDAI has been the world’s fastest-growing major automaker since 1999.

- Lehman Brothers Holdings (excerpted from the April 25 version of Time Asia)

TIME USA (June 27, 2005)

HYUNDAI is taking global auto

industry by storm.

1. Global Power Brands (2005)

2. Long-term Brand Vision

3. Hyundai’s Global BI Strategy

4. Implementation of Brand Strategy

5. Product and Design Identity

6. Communication Strategy

■ ■ BRAND SCHEMEBRAND SCHEME

III. Hyundai’s Brand Scheme

StrategyStrategy

GoalBI (Setting)

CommunicationCommunication

Product & DesignProduct & Design

Consumers

1-1. Global Power Brand (2006)

- Source : Business Week & Interbrand, July 2006

Rank BrandBrand Value

($ Bil)

1 Coca-Cola 67.0

2 Microsoft 56.9

3 IBM 56.2

4 GE 48.9

5 Intel 32.3

6 Nokia 30.1

9 Toyota 27.9

7 Disney 27.8

8 McDonald’s 27.5

10 Mercedes 21.8

Global Brands Top 10 Automotive Brands (in Global Brands 100)

27.9 (1)

21.8 (2)

19.6 (3)

17.0 (4)

11.1 (5)

6.03 (6)

3.93 (9)

4.17 (7)

4.08 (8)

3.11 (10)

(in $ Bil.)

Toyota

Mercedes

BMW

Honda

Ford

VW

Porsche

Audi

HYUNDAI

Nissan

75th Global Brand, 15% up from ’05,

ahead of Porsche, Nissan and Lexus

3.07 (11)Lexus

Current Status

2 4 6 8

5

10

15

20

Brand Value(in $ Bil.)

• 3.4 Mil. Units• $17.0

• 7.9 Mil Units• $27.9

• 5.1 Mil. Units• $6.03

• 3.8 Mil.Units• $5.1

Sales Unit(million)

Brand Vision in 2010

2 4 6 8

5

10

15

20• 3.9 Units• $18

• 9.3 Units• $30

• 5.6 Units• $8.5

$17.0

•Sales data come from Global Insight, mar. 2006 with Brand Values from “2006 Global Best Brands 100”, Business Week, July 2006.

1-2. Long-term Brand Vision

Sales Unit(million)

Refined&

Modern

Dynamic&

Youthful

Premium

Value

BrandIdentity

“Refined & Confident”Brand Identity

1-3. Brand Positioning and Brand Identity

Brand Positioning

“Exciting & EnablingBrand Identity

● Sleek Design

● Intelligent

Ergonomic

Engineering

● Excellent Service

● Safe and Reliable

● Top-tier Quality

● Stylish

● Inspiring

● Thoughtful & Approachable

● Self-Assured

● Trustworthy

● Respected Global Player

Refined &

Confident

Tangible / rational attributes and themes desired for the HYUNDAI brand

Functional AttributesFunctional AttributesEmotional attributes and themes desired for the HYUNDAI brand

Emotional AttributesEmotional Attributes

Hyundai Brand Identity

1-3. Brand Positioning and Brand Identity

Exciting &

Enabling

Tangible / rational attributes and themes desired for the HYUNDAI brand

Functional AttributesFunctional AttributesEmotional attributes and themes desired for the HYUNDAI brand

Emotional AttributesEmotional Attributes

Kia Brand Identity

1-3. Brand Positioning and Brand Identity

● Dynamic Styling

● Responsive Engineering

● Versatility

● Well-Equipped

● Safety and Reliability

● Top-tier Product & Service Quality

● Fun

● Entrepreneurial

Spirit

● Trustworthy

● Respected

Global Player

– Brand Identity is . . .• Our aspiration for the brand — what we want our constituencies to experience and, in

turn, think and feel about our company

Where the Company Meets the Consumer

and Other Stakeholders

What CompanyWhat Company

IntendsIntends

Brand Beliefs Are Formed and Reinforced

Intended Intended Brand Brand

Positioning Positioning Is “Behind theIs “Behind the

Walls”Walls”

Brand Positioning Positioning Statement

What our Constituencies

Perceive

PERCEPTION PERCEPTIONEXPERIENCEEXPERIENCE ACTION ACTIONINTENTINTENT

What What Competitors, Competitors, Channels and Channels and

Others DoOthers Doand Sayand Say

What Company What Company

Does and SaysDoes and Says

2-1. Brand Positioning and Brand Identity

Refined & ConfidentCommunications, Design, R&D, etc.

Driving Experience,Sales, Service, etc.

A network of Thoughts & Feelings

Since brand beliefs are formed at various touch-points, what a company says and does at every constituency need to be aligned, so that the aspired brand perception can be created in consumers’ minds.

2-2. Brand Positioning and Brand Identity

MarketingMarketing

DesignDesign

ChannelsChannels

R&DR&D

SalesSales

Human Resources

Human Resources

FinanceFinance

Business Business StrategyStrategyBusiness Business StrategyStrategy

Brand

Strategy(Positioning)

Consumers’ Brand Experience and

Perception

The ultimate goal of the HYUNDAI communications strategy is to help move HYUNDAI

closer to its aspirational Brand Identity of “Refined & Confident”.

Overview of HYUNDAI’s communication activities

3-1. Communication Strategy

Objectives

Communication of the HYUNDAI brand as “Refined & Confident” consistently and globally

Balanced Moderns

Integrated Marketing Communication Consistent use of visual and communications standards

Audience

Communications

Consistency

Integrated Marketing Communication

3-2. Communication Strategy

Direct marketing

Advertising

Public Relations

Sports Marketing

Motor racing

Relationship marketing

Product placement

Exhibitions / Auto show

Merchandising

Point of Sale

Web Sites (Information and E-commerce)

Promotions

Sales literature

Since the HYUNDAI brand is the sum of all the information available about the company and its

products and services, HYUNDAI integrates all of its communication tools to achieve its Brand Identity.

Sports Marketing

3-3. Communication Strategy

World-cup Soccer

Sponsorship

World-cup Soccer

Sponsorship

Official Partner for FIFA World Cup 2002, 2006 & 2010

Official Partner for UEFA EURO 2000, 2004 & 2008

Category Sponsor for Korean National Soccer Team

& KFA (Korea Football Association)

Chonbuk HYUNDAI Motor Professional Soccer Team

Official Partner for FIFA World Cup 2002, 2006 & 2010

Official Partner for UEFA EURO 2000, 2004 & 2008

Category Sponsor for Korean National Soccer Team

& KFA (Korea Football Association)

Chonbuk HYUNDAI Motor Professional Soccer Team

Olympic MarketingOlympic

Marketing Grand Sponsor of the 2004 Athens Olympic Games Grand Sponsor of the 2004 Athens Olympic Games

Motor RacingMotor Racing World Rally Championship (WRC)

“Click Speed Festival” in Korea

World Rally Championship (WRC)

“Click Speed Festival” in Korea

4-1. Past Hyundai Design

Inconsistency in Design No Philosophy and Strategy No Design Identity

4-2. Product Line - up

A D E

Sonata

Grandeur / Azera

Equss / Centennial

Trajet

Santa Fe Terracan

Santro

B

Click / Getz

C

Verna / Accent

Avante / Elantra

Tuscani / Tiburon

Lavita / Matrix

Tucson

Passenger Car

MPV

SUV

HMC Best Models in 2005

1. Elantra 427,258

2. Sonata 326,655

3. Tucson 267,936

4. Getz 215,912

5. Accent 209,490

6. Santro 194,541

7. Santa Fe 171,153

8. Grandeur 98,364

9. Porter 91,932

10.

Starex 90,542

Entourage (US only)

4-3. Outside Evaluations (from Research Institutions)

Elantra - The most delightful vehicle (Jan., 2005) (Strategic Vision)- 1st ranked in “Total Value Index 2004 (Small car) (Strategic Vision)

Sonata - The Best Family Sedan in “Drivers’ Choice Awards (Feb., 2006) (Motor Week)- 2nd ranked in “Total value index (Oct., 2004) (Strategic Vision)

Grandeur / Azera - Top Car in 2006 Vehicle Satisfaction Awards (May, 2006) (AutoPacific)

Tucson - 1st ranked in “2005 Total Quality Study (Small SUV) (Strategic Vision)

4-4. What is the Hyundai product and design?

Well…. then, what about Hyundai? What attributes come to your mind,

when you see Hyundais on the streets?

“Hyundais are not bad, but still not good enough”

““I don’t know”I don’t know”

““Asian”Asian”

““Unattractive”Unattractive” ““Practical”Practical”

““Value for money”Value for money”

““Traditional”Traditional”

““Global quality”Global quality”

““Modern Design”Modern Design”

Sleek and Refined Style

Ergonomically engineered, Convenient & Comfortable

Balanced Performance(Ride & Handling, Engine Performance)

Safety and Reliability, Top-tier Quality and Service

HYUNDAI’s New Car Development Directions

Design

Package

Performance

- 7 -

5-1. Design Identity

Must-haves

5-2. Product Identity (Example)

CitroenPeugeot Conventional, Sporty, Dynamic

- Values on Solidity, authenticity- Joyful and young

- Personality, originality

Innovative, cozy, radical

C4

307

Dynamic Style (Peugeot - 307) / Innovative Design (Citroen – C4)

730 (C4)

716 (307)

935 (C4)

888 (307)

4,212 (307)4,273 (C4)

2,608

Specifications:4,212×1,746×1,510 (L x W x H) W/Base:2,608 Sales :480,926 (’05), released in Feb., ’01

Specifications : 4,273×1,773×1,471 W/Base : 2,608 Sales :217,579 (’05), released in Sept., ’04

▶ Same platform + same wheel base• PF2 ( C1 Seg )

Sleek and Refined Style

Unique Design Identity

Up until now Hyundai has not built up its own identity in design, due to

- Relatively short history in automotive industry

- A variety of design experiments

Design Identity

5-3. Product and Design Identity

5-4. Familiarity

6-1. Glocal Brand & Product Strategy

Hyundai will Introduce cars and trucks on a glocal basis to cover one big global market and to meet local consumers’ tastes

(taking into account differences in cultures, emotions and consumer characteristics)

K (Korean) - Factors

Let’s think about following….

Taiwanese brand, design and characteristics

- Cultures

- Philosophy

- and so on…

→ T (Taiwanese) - factors

“Thank you”