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South Korea’s two largest automakers – Hyundai Motor Co. and Kia Motors Corp. — saw the ratio of their marketing spending to sales decline in recent years as they depended less on big price cuts to lure customers, industry data showed Thursday.
According to the data, the two firms’ ratio of marketing spending to the combined sales stood at 3.7 percent in 2014, down from the previous year’s 3.8 percent. The ratio is also lower than the 4.9 percent tallied in 2010.
Hyundai Motor’s marketing spending-sales ratio fell from 4.8 percent in 2010 to 3.4 percent last year, while the ratio for Kia Motors, its smaller affiliate, dropped from 5 percent to 4.3 percent over the cited period.
Such decline in marketing spending including promotion, commercials and incentives for dealers came despite a fiercer competition from their Japanese rivals armed with price competitiveness in major global markets supported by the depreciating yen.
Hyundai Motor and Kia Motors have refrained from excessive price cuts and plan to stick to that policy this year despite tough market conditions.
They instead plan to work hard to keep their product quality high and unveil popular models with updated features, while focusing more on financing and lease support for customers than on incentives.
Hyundai Motor and Kia Motors posted combined global car sales of more than 8 million units last year, which was more than their previous target of 7.86 million.
They earlier set their annual sales target for this year at 8.2 million, but the growth rate is the weakest in a decade, apparently affected by output constraints and intensified competition in overseas markets. (Yonhap)
