Comparative Advertising Case Study

The car war is intensifying.

Manufacturers and their dealers fight this time the battle through media campaigns –at times going beyond limits of corporate values –.

While comparative advertising and playing with words like “Santro ends Ikon’s Josh” are not new, what has stirred the hornet’s nest is the series of advertisements released by some Hyundai Motors northern dealers questioning the future of its close competitor, Daewoo Motors India Ltd.

“Car at your homes, company on the roads”, screamed the ads released by Hyundai Motors dealers some time back in some Hindi publications. With the Korean conglomerate Daewoo in dire straits back home and in the process of restructuring its operations, even scouting for partners for its automobile business, there are no prizes for guessing whom the dealers of Hyundai Motors are referring to here. “Such an action is highly deplorable. It didn’t happen in Korea nor anywhere in the world,” fumes S. G. Awasthi, chairman, Daewoo Motors. “And the Hyundai Motors’ dealers wouldn’t have released such ads without the consent of their principal.” Welcoming healthy competition in the market place, he says, “It is for the first time in India that the car market is witnessing real change and competition, and we are positive towards that.”

But others, according to him, don’t seem to share his views;
they resort to unethical media campaigns. “It is unethical on two counts: the values of Indian corporate systems are thrown out and in fair competition, no one would woo a buyer by levelling the charge of a competing company going bankrupt. And remember, it will boomerang in the long run. Awasthi is not against comparative advertising per se. As a matter of fact, it was Daewoo Motors, which introduced the concept in the Indian automobile industry. His advocacy is that such campaigns should be based on relevant facts and authentic facts. “One should not hit below the belt, as Hyundai Motors did to us,” he says. “The strange thing is that Hyundai Motors, Korea, is said to be a serious contender for acquiring Daewoo Motors back home. At this juncture, questioning our future in India makes one wonder about how serious the Hyundai group is about its bid for our parent company,” wonders Awasthi. According to him, Hyundai Motors, in its ads, has been giving out wrong information about Matiz. “The engine for Matiz was actually developed at Daewoo’s German technical center in 1997, contrary to what Hyundai Motors claims: that Matiz’s engine is of 1980 vintage.” Byung Soh Min, deputy managing director, communications & services division, adds, “Hyundai Motors is yet to try out 40 per cent of set crast test and 50 kilometers per hour (kph) side impact test on its Santro in Europe. Whereas we have done the above successfully. Similarly, Matiz scores over Santro in terms of engine power, average fuel efficiency, fuel flow system…” What such ads clearly show is the car makers’ desperation.

A look at the March 2000 sales figures of the small car segment will explain the intense and interesting competition that rages in the segment. While Tata’s Indica clocked a sales figure of 7,270 units during March, Hyundai Motors’ Santro and Daewoo’s Matiz registered a sales figure of 6,418 and 6,064 units respectively. On the other hand, Maruti Udyog sold 7,510 units of Zen and 4,838 units of Wagon R. Except for Maruti Udyog’s Zen and Tata’s Indica, all other models are in the 4,000-6,000 unit sales band.”In this scenario, our sales graph has been steadily going up, unlike others whose graph goes up and down every month,” says Awasthi.

Given the market trend that Maruti is no longer the first choice of the car buyers, the fight amongst the new manufacturers to gain market share is understandable.