A 70-year-old man living in Kyushu, Japan, recently purchased the electric car Ioniq 5. Hyundai Motors, which re-entered the Japanese market last year, had been selling solely online in the local market. The older man was initially drawn to the Ioniq 5 but was unfamiliar with online purchases, not only for cars but for other items as well. He bought the car after visiting the Hyundai Customer Experience Center (CXC) in Yokohama and speaking to an employee.
Since this was his first electric car, he listened carefully to the explanations about the unique features and charging methods that other cars do not have. A few days after returning home with his new purchase, the man wrote a letter to Cho Won-sang, the head of Hyundai Motors’ Japanese branch (representative of Hyundai Mobility Japan). In the letter, he expressed his exhilaration over the online purchase of 60 million won (approximately $50,700) and his gratitude for the newfound vitality in his life after buying the car. Cho responded, “I was touched as if he acknowledged Hyundai’s unique hospitality, so I also wrote a reply by hand.”
The Hyundai CXC Yokohama, which I visited on the 26th, is a complex hub established as Hyundai restarted its business in Japan after 12 years. It’s a place where customers can handle everything from vehicle purchase consultation to delivery and maintenance before and after buying a new car. Cho said, “We wanted to make customers feel no resistance or burden before buying a car, and we wanted to provide thorough vehicle management and maintenance afterward. The purpose was to provide a ‘journey’ before and after related to the car.”
CXC Yokohama was remodeled from an old warehouse, with only minor modifications inside and out. The showroom wall on the first floor is made of recycled cypress wood. In Japan, Hyundai has introduced environmentally friendly cars such as the Ioniq 5 and the Nexo hydrogen fuel cell car. The customer experience space also emphasizes an eco-friendly impression. Inside, a famous local perfumer’s fragrance, centered around cypress, subtly fills the air with a scent reminiscent of a forest.
The vehicle maintenance area is also not the usual drab sight. Since there are no exhaust gases and the space was designed from the outset for customers to see the entire vehicle maintenance process, it’s visible from not only the first-floor showroom but also the lounge on the second floor. In addition, cameras are installed in each work bay to show the maintenance situation in real-time up close.
One of the spaces they put a lot of effort into creating is the vehicle delivery area. This is where customers receive their new cars and are given about an hour’s worth of information about the vehicle and a celebration. They took into account the local culture, where people enjoy detailed explanations. Yuji Uchida, a sales specialist in charge of local guidance, said, “Other brands don’t have such a place. Having a unique and meticulous approach in a separate space has resulted in high customer satisfaction. Some people even come from 2-3 hours away to enjoy the delivery ceremony after seeing it on social media.”
Cho, the head of the company, is a marketing expert who has worked in various markets worldwide, including Korea, the United States, Europe, and China. He also lived in Japan during childhood and is now in charge of local operations as Hyundai re-enters the market. He sees Japan as the most demanding market in the world, with numerous tariff and non-tariff barriers, narrow roads and parking lots, and conservative consumer tendencies, all disadvantageous for foreign cars.
In its first year back, the Ioniq 5 was recognized as the import car of the year in Japan by expert groups. However, the stubborn Japanese consumers were reluctant to open their wallets. The sales volume over the past year since last August is about 700 units. Cho said, “When re-entering Japan, we focused more on ‘mind share’ than ‘market share.’ We believe that being recognized as the ‘Hyundai’ brand among Japanese customers is the value we can gain as a representative of Korea in the local market.”
He continued, “We are building a premium image by creating a halo effect with various line-ups, including dedicated electric vehicles, derivative models, and high-performance electric vehicles. We prioritize a strategy of ‘seeping into’ Japanese society naturally, rather than aggressively increasing immediate sales by expanding local companies and dealer networks and advertising.” He judged that the approach of becoming familiar and friendly to each other, or “najimu” in Japanese, is influential among the Japanese.
Rather than selling cars, they are closer to proposing a new lifestyle. Cho said, “In the same context, we offer a warranty program that the company will bear the costs incurred in vehicle inspections and minor maintenance, and we allow customers to experience electric cars through car sharing or rental cars directly. It’s a process of solidifying the foundation one by one to be recognized by local consumers.”
The business model of selling environmentally friendly cars only online, which has not been tried anywhere else, could potentially become a strategic asset for the entire company in the medium to long term based on the experience in Japan. Many people used to buy airplane tickets through travel agencies, but now many do so through applications. The purchase of new cars is also expected to change, and they are gaining experience in advance.
Cho said, “The sale of cars will also be digitalized, and managing the entire customer purchasing journey in that context is a big task. Since we are selling online in the challenging Japanese market, we don’t care much about the criticism that our sales are weak compared to other companies.”
By. Choi Dae Yeol
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