Last night while watching the AFC Championship Game, I saw an ad for Hyundai Assurance, a new program offering loan forgiveness if you buy a Hyundai car and then subsequently lose your job. I nearly fell out of my seat. Here is a company that is attempting to financially de-risk the auto purchase if you decide to buy with them. The implication of this promotion is that the cost of bad loans is far less than the cost of idle plants and rotting inventory. From a consumer perspective, this offer may cause switching among those consumers already in the market for a new automobile, but I still have a hard time seeing any promotion stimulating incremental demand.
From a brand perspective, the Hyundai Assurance promotion makes a lot of sense because it reinforces Hyundai's equity around service and support. They are already known for having the best warranty in the industry. Now, with the financing offer, they've taken that message one step further. As one of my peers said, "it is compelling because it says that we're all in this together." I also get the feeling that Hyundai is interested in a relationship with me rather than just selling me a car.
The only question remaining is, how long will it be before Hyundai applies for a Federal bailout?