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January 2, 2013

Steve Shannon


CHRIS REIMER:  We want to welcome Steve Shannon vice president of marketing for Hyundai Motor America to the media center here.  I know some of you guys have come in, and it's now officially a tradition I think to say that we look forward to hearing from you each year.  If you would like to make some opening comments about Hyundai's involvement at the event.  We are all excited to be back.
STEVE SHANNON:  Great, great, yeah, first of all, thanks to you guys for coming in and coming to the tournament, because it's an important part of this event.
We just love it here.  There's a lot that's very special about this tournament:  This location, this golf course, it's a great place to bring guests.  It's the start of the year.  There's just something especially, I guess maybe in our business, but close the books on December and you take about a week off and you're right back at it.
So having big things happen in the first quarter for us, whether it's the Super Bowl, whether it's the Academy Awards, the Detroit Auto Show; but I think the Tournament of Champions is the very first one and there's something that for a whole lots of other reasons makes it really exciting.
We love the field, these players.  Last year, it was all about young guns.  A lot of these are‑‑ young stars; these are stars.  It's going to be a great couple days of golf.
And I think with that, I'll just kind of throw it up to questions you guys have.  It's great to be here.

Q.  (Inaudible.)
STEVE SHANNON:  Why don't we talk afterwards.  (Laughter) yeah that luxury part of our lineup, kind of a quiet success.  You look at the Genesis and the Equus, they have been in the market either between 2 1/2 and four years.  Each of those cars every year has had both a unit volume increase and a market share increase, which is almost unheard of.
You know, in our business, you launch a car and it's usually hot for a few years and then it starts to cool off because it's not the newest thing and there's more competition.
So those two cars, year over year increases, and interesting, too, our rough numbers, if our national market share is about five percent, our market share where the Genesis competes and the Equus competes, one is six percent and one is seven percent.  So an even more remarkable kind of number and as strong as is the Elantra and Sonata; as Hyundai is known as a mainstream car company, those two cars actually over‑perform.
What I'm saying, we are excited about the growth of our luxury business, and of course here in golf that's the bull's eye.  If you look at things, if you take luxury car buyers in general, people that buy BMW, Mercedes, Audis, and you look at their passion points, golf by far and away is No. 1.  No. 2 is actually about half of what No. 1 is.  It's not rocket science.  If you want to talk to luxury car buyers, golf is a great way to do it.

Q.  (Regarding being in last year of contract for the tournament).
STEVE SHANNON:  You're right, this is year three.  We are very bullish.  We don't have anything to announce this week, partially because we are so focused in executing another great events.  But we've had discussions with the PGA TOUR.  They have been great partners of ours.  Certainly our bias is to continue, but we just need to get this tournament behind us and then have some more discussions with them.
But this has done ‑‑ you know, a lot of the good things we wanted to do with golf.  It's also been something that each year we have been able to make improvements to.  Year one was kind of the dog that caught the car; I think we made the deal with six weeks ago and we had to scramble to put the event together.  We had a full year's running room last year.  We had people like Brian and Championship Management group did an awesome job with the tournament.  Golf Channel did an awesome job last year.
This year now, we'll broadcast on NBC, we'll do more local involvement including running a 5K and a big charity part of that is a $75,000 check; so we have increased here in year three some of the outreach here in Hawai'i.
If we look at some of the business to business elements we have been able to incorporate coming here now, it is the most prestigious award a Hyundai dealer can win and it's for customer satisfaction.  We like dealers who sell cars, but we also like them to take care of customers.  So the No. 1 award we have for dealer or customer satisfaction allows them to come here.
So the point is, we have done a lot of things each year to improve our involvement and we would look to do that in the future again.

Q.  How many do you havehere?
STEVE SHANNON:  We have about 25.  We have some actually from two different programs, a big group from our normal Hyundai program and we also have a special Equus‑only program, so we have some Equus dealers here, as well.

Q.  With the wrap‑around schedule starting next year, does that change the landscape of this tournament, or does the tournament still have the same meaning?
STEVE SHANNON:  I guess in some ways, we'll see, but we are not terribly concerned about it.  I think there is that aspect of it's the start of the year, so even if it's literally not the first PGA TOUR event, there's something about the start of the year and there's something about this location.
Safe to say that it also provides now for some guys an opportunity, if they are looking for a few extra points that maybe are not where they wanted to be, here is a nice tournament that pops up here in the first week of January.  And some people may, say, you know, I may head to Maui to try to get some points there.
We are not terribly concerned.  You would probably say that if you look at a lot of big sports of late that have done some restructuring of their schedule and such, generally it's been successful.  So we have got pretty good confidence that the PGA TOUR kind of knows what they are doing and it won't diminish and it will only help us.

Q.  A few years ago you had very little involvement in golf and now on top of this event, I think you've expanded your relationshipwith ‑‑ inaudible ‑‑ is there a plan five years out?  Because if you agree with the support for high endand there's 15 point something millions cars sold in the U.S. this year and the projection going up in the next three years, that's means that's something you're focused on‑‑ is that margin placed or that group of people that would buy your luxury cars; what is your plan with golf involvement over that period of time?
STEVE SHANNON:  Yeah, all right, good observation about our work with Hank‑‑ take one step.  That came about; we did a series of golf clinics this past year.  We did five at TPC courses around the country where we invited luxury intenders‑‑ who people that own BMW, Mercedes, Lexus, to come spend half a way with us, drive the cars, and also Hank did a golf clinic and he had a number of different sort of golf stations and skills courses and it was terrific.  He does a great job.  People loved it.
You get people in a pretty non‑threatening‑‑ you're away from the dealership, that worked really well.  We are looking at doing more of those next year.  We are also looking at maybe doing some things more broadly with Hank.  We have not sorted all that out yet.
But I think in general, we don't have any announcement about a particular program, but just in general from starting three years ago with just this event.  And improving the event last year, we added those golf clinics; we have done some advertising, for those who watch any of the broadcast.  I think for the first time, we have some golf‑themed TV spots, which is a new thing for us if you watch the Golf Channel.  And we're liking it.  We had our agency work on how do you take the sort of vibe and MoJo of golf and put it with the cars, and we like how that stuff came out.
So I think in general, there's a trajectory of more golf but nothing specific.  Kind of an organic, continuous‑growth type thing.

Q.  How easy is it for to you measure your ROI‑‑
STEVE SHANNON:  I would say it's about 50 percent finance and about 50 percent art.  Let me take the golf clinics, for example.  We know what the through‑put was; we know how much we spent.  We tracked those people.  So we will know at three‑month, six‑month, nine‑month intervals, so we can do a sales match.  So Joe Smith from 13 Main Street who came to the event, did he buy a car later.  So we can measure that kind of thing.
Certainly we can look at broadcast numbers.  A great piece of news I heard this morning:  We are about double the number of ticket sales here as of now where we were a year ago.
So you kind of line up a whole set of metrics and you look at all of them and you get as much math as you can behind it, and even compare it.  So we are involved in college football and we are involved in some other events and you kind of look at how do some of those key numbers vary by sport.

Q.  Your involvement in the broadcast, is there discussion‑‑
STEVE SHANNON:  Yeah, we are really excited about that.  Sort of a marketing guy, I thought the broadcast last year was terrific, so if they can beat that, which they are doing with 15, 16, 17 more cameras and their A broadcast team; I thought last year the guys were good and three hours on Sunday.  I personally didn't have anything to do with it.  I think just in general, I'm assuming that NBC saw that it was a pretty good property here and pretty good field here, so let's amp it up a little bit.

Q.  Inaudible.
STEVE SHANNON:  I don't know, I'm going to have to plead ignorance on that. 

Q.  Is there anything different in this event in any way, shape or form that would affect your decision going forward?
STEVE SHANNON:  I would say there's nothing dramatic.  I think the time of the year, the location, the golf course itself; a lot of those things, that's what makes this golf special like it is; obviously that it is only for previous year winners.  So these key things are kind of foundational, and we are happy with all those.
So it's all‑‑ I don't want to say at the margins, but it's all sort of continuous improvement kind of things.  But the basic ingredients we see carrying over and we are good with that.

Q.  (Time frame on closing a deal)?
STEVE SHANNON:  We really don't.  Other than to say, the sooner we do it, we can then get serious about planning next year, so I would probably give it a couple months.  Probably not more than a couple months into the year and we should be wrapped up.

Q.  Inaudible ‑‑ by pushing the week back a week, just the way the calendar runs‑‑ any thoughts to changing the date?
STEVE SHANNON:  You know, I don't think so, and even the Detroit Show moves, this year it's a year later than it was last year.  I know last year it was on a plane even before this ended; this year, I don't have to be.  It's a little bit of a crap‑shoot who moves when.
I think we have been able to make it work really well what happens, so we are not too concerned about that.  That tends to float a little bit.
Again, I want to thank you all for coming and supporting the event.
CHRIS REIMER:  And we thank you and your team, as well.  From a PGA TOUR standpoint we couldn't be more thrilled with everything.  Thank you for joining us today and thank you everybody for coming.

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