Making headway in world scene

BMW Korea CEO Kim Hyo-joon talks to Business Focus during a recent interview held at his office in Seoul.

BMW Korea has emerged as a frontrunner of the German-based automaker’s units across the world not only in terms of sales but also in terms of corporate social responsibility (CSR) programs.

BMW Korea CEO Kim Hyo-joon said that the global organizations of BMW are ready to copy the Seoul-based company’s CSR arm, the BMW Korea Future Foundation.

Along with its seven major dealerships, BMW Korea channeled 3 billion won last year to set up the charity entity with a unique fashion of raising funds for sustainable social projects.

“Out business is more than about merely selling cars. It involves such work as communicating with society and aligning our values to those of individuals and society ― the background of the future foundation’s birth,’’ Kim said in a recent interview with The Korea Times.

“Some countries including Russia, Japan and India are poised to follow suit. It has a shot at becoming a program of the whole group. I think it is actually a matter of timing.’’

In one of the foundation’s operations, whenever a motorist buys a vehicle from BMW Korea the latter requests the former to donate 30,000 won to the charity outfit.

When the buyer accepts it, the dealer in charge of the sales and BMW Korea offer the same amounts apiece so the total contribution is 90,000 won. If they embrace a financing format, BMW Financial Service will also offer an additional 30,000 won.

A majority of BMW sedan buyers have taken part in the matching-fund program so the foundation can conduct a variety of educational and eco-friendly programs aimed at helping the least well-off and improving the environment in Asia’s fourth-largest economy.

“Let’s say we sell some 30,000 cars a year. If all our clients partake in the initiative, we can collect a maximum of 3.6 billion won. On top of presenting funds, our customers are also welcomed to offer their talents or experiences to the underprivileged,’’ the 55-year-old said.

The unprecedented work was also recognized recently by the European Union Chamber of Commerce in Korea (EUCCK) that gave the Social Benefactor Award to BMW Korea.

Living legend

Kim is known more for his knack in boosting sales in Korea, which was once regarded as a hostile place for global automotive brands due to nationalistic drivers who favored local players such as Hyundai and Kia.

Things showed signs of change from the mid 1990s and one of those responsible for creating a chasm in the seemingly endless love affair between Korean consumers and Hyundai or Kia was Kim.

With expertise in finance, Kim joined BMW Korea back in 1995 as a founding member and took the reins at the corporation in 2000 to make a dent in the business during the first decade of the new millennium.

Annual sales were only 833 in 1999 but the figure almost doubled in the first year with Kim at helm to 1,626. Over the next 10 years the number jumped 14-fold to 23,293 last year.

It was a bit of a surprise when BMW Korea appointed Kim as CEO, because the top job at a sales-oriented carmakers was deemed not the place for a number-cruncher with a financial background.

He instantly dissipated skepticism in a unique way ― instead of going all out to crank up the bottom line as expected from finance guys, Kim came up with whole new ideas in dealing with the market through a grassroots approach.

“After taking charge, I visited showrooms of BMW Korea without revealing my job. For about half a year, I met around 350 people and concluded that premium services were the answer,’’ Kim recalled.

BMW Korea therefore increased the number of repair shops to 35 nationwide, the most among global brands here.

The strategy paid off by successfully dealing with complaints of customers that foreign brands lack service centers despite the growing number of showrooms.

Commoditization

The economic common sense is that rarity is one of the most significant keys to a higher market value for specific items. In other words, popularity and rarity do not mix well ― most popular things are too common to be cool.

Hence, entrepreneurs are advised to sell affordable products in bulk or vend high-end items in limited amounts to loyal followers who believe in luxury fashion brands.

They are known to burn unsold products instead of selling them at discounted prices as they put the long-term brand power ahead of short-term profits.

Under the mantra, critics claim that the brisk sales of BMW can be a backlash because they are feared to dilute the upscale image of BMW.

In the opulent Gangnam districts in southern Seoul, some say BMW is no more a status symbol to represent the owners’ wealth or reputation as it has become a plain-vanilla automobile there.

Yet, Kim has a different idea. He believes that it is possible to achieve the two seemingly conflicting goals of selling the products en masse while maintaining their premium brand image.

And his ammunition was the premium services, the very tool he relied upon in catapulting BMW Korea to the top league over the past 10 years.

“We ran a lounge for BMW 7 Series customers. What our customers buy from BMW Korea is not merely the vehicle but also culture related to the specific model,’’ he said.

The company opened the lounge in southern Seoul midway through 2011 where BMW 7 Series drivers could enjoy diverse cultural experiences such as classes on operas, auctions and teas. It was a grand slam.

As such, BMW Korea has showcased how to realize the rare combination of chalking up brisk sales without sacrificing its upscale image as seen during its market dominance of late ― it is currently a runaway leader among foreign brands.

Three missions

Kim proved he can drastically move the needle in the sales of a big company in difficult times.

His goals are not merely about financial performance, however, as amply demonstrated by the BMW Korea Future Foundation, which he started thinking about five years ago.

In fact, he has two more social missions in mind on top of the foundation ― One is to make a mega-sized driving track near Seoul while the other is to create an automotive museum here.

“We plan to build a driving center at outskirts located less than an hour’s drive from Seoul. It would be only the fourth such facility for BMW and the only in Asia. In a sense, we can be an Asian hub of BMW,’’ he said.

Currently, BMW has three driving centers ― two in Germany and one in the United States.

Kim branded the automotive museum as a long shot at the moment but it is his last task to complete as the leader of the most successful foreign vehicle brand here.

“I have dreamed of three jobs. The Future Foundation is done and the driving track project is underway. I also dreamed of a quality museum near Seoul that can show off the time-honored history of automobiles and cultivate fresh innovative technology,’’ Kim said.

“BMW Korea might not be able to establish one on its own, we might need the help of other automakers. We have yet to fully materialize the idea.’’ <Korea Times/Kim Tae-gyu>

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