Regional ad associations and individual dealer co-op advertising will see big increases this year, said Dave Zuchowski, head of sales at Hyundai Motor America.
"We're doubling co-op money this year from last year and significantly increasing Tier 2 (regional), yet not backing down from Tier 1 (national)," Zuchowski said.
The extra dealer money kicked in this month.
Zuchowski says co-op money will increase from $25 million in 2009 to $50 million this year. He says funds going to the regional ad associations this year will rise by about 35 percent.
"We're now spending about $2 for every $1 the dealers spend" on regional ads, Zuchowski said. "We think we've got as competitive Tier 2 and 3 as anybody in the business."
Hyundai began reducing its contributions to dealers in 2006 to gain a bigger voice on the national stage. The company now sponsors big TV network programs such as the Super Bowl and the Academy Awards.
"We significantly reduced dealer money and put more of that money into Tier 1," Zuchowski said.
"That was controversial. The dealers felt they lost autonomy in their ability to market cars."
Dealers will play an important role as Hyundai next month debuts a redesigned version of the Sonata, its largest-volume car.
Hyundai will spend about $160 million to bring out the Sonata -- the most it has spent on a vehicle launch -- and it wants the dealers to chip in at the regional and local levels.
"For example, when we launch Sonata, the dealer groups will advertise the $209 lease payment," Zuchowski said. "Most of the Tier 1 money will be spent on Tucson and Sonata.
"We think that will be the key to our success. As Sonata goes, so does Hyundai."
Hyundai's total marketing budget for 2010 is estimated at $550 million.
Dealer council Chairman Scott Fink says dealers have been fighting for the cash, particularly at the local level.
"We have told them that individual co-op money is the most impactful way to come to market," he said. "Co-op is even more effective than Tier 2."
(Source: Automotive News, 01/18/10)
