Hyundai To Enter U.S. CE, Appliance Markets

VERNON, CALIF.— Hyundai will enter the U.S. consumer electronics and major appliances markets with a broad line that builds on the brand's automotive industry reputation for affordability, solid worksmanship and an extended warranty, said Bill Mayhew, president of Hyundai Electronics USA.

Mayhew's company, a subsidiary of Hyundai Electronics, plans national and regional TV advertising, a sweepstakes for Hyundai vehicles, and up to 100 percent co-op advertising dollars for dealers depending on volume. The subsidiary, he said, will leverage the brand awareness of $250 million worth of annual Hyundai car advertising.

Hyundai Motor severed official links with Hyundai Electronics and other Hyundai companies in April 2001. All Hyundai companies, nonetheless, are informally linked because each is owned or controlled by various members of the family of Chung Ju Yung, the deceased founder of the Hyundai group of companies, once Korea's largest conglomerate.

The U.S. electronics effort follows Hyundai's entry last year into the European, Asian and Australian electronics markets, Mayhew said. In the United States, the company unsuccessfully tried to sell a small number of CE and appliance products in the 1980s, following Hyundai Motors' 1986 entry into the market, he said. A few years ago, Hyundai also marketed desktop and laptop PCs in the U.S., he noted.

This time, Hyundai plans audio, video, home phones, microwaves, refrigerators, and some small appliances, Mayhew said. The first 40 products, shipping in March or April, consist mainly of portables audio products, including MP3 players, and cordless phones, all with three-year warranties. Opening suggested retails are $19.95 for CD boomboxes, headphone CDs, and a 5-inch black-and-white portable TV with AM/FM radio.

They will be followed in the late second quarter or early third by home-theater-in-a-box systems, DVD players and TVs, including rear-projection HDTVs, LCD monitors and plasma TVs. Appliances will come in the third or fourth quarters. "We have the models, features and price points all planned," he said, without disclosing details of the lineup.

The company is targeting all channels of distribution, with select models earmarked exclusively for certain channels. The company is targeting electronics/appliance stores, mass merchants, drug chains, warehouse clubs and grocery chains, Mayhew said.

Hyundai will manufacture higher priced products, and Chinese manufacturers will build U.S.-market exclusives for Hyundai at the lower end, he said. Hyundai has already put its products and competing products before consumer focus groups, and the Hyundai products were "well received," Mayhew claimed.

The consumer sweepstakes will start in the spring, tying into Hyundai's car ads and giving away an $11,000 Hyundai Accent. Like automaker Hyundai Motor, Hyundai Electronics will target the college market as part of its focus on the 18-to-35-year-old demographic.