Kashmir post: From KFC to Toyota, global firms scramble for damage control

The South Korean Foreign Minister, Chung Eui-yong, dialled his Indian counterpart, S Jaishankar, in New Delhi on Tuesday. His government, he said, “regretted the offence caused to the people of India”. A day earlier, India had summoned the South Korean ambassador to express its “strong displeasure" over “an unacceptable social media post”.

As the storm stirred up by a social media message (now deleted) from an unverified account by a Pakistan distributor of Seoul-headquartered Hyundai, which indicated support for separatists on the so-called Kashmir Solidarity Day, takes a diplomatic overtone and triggers calls in India for a boycott of the brand, image consultants say the auto major has driven itself into a tricky corner.

Brands, they add, need to chalk out clear instructions for people associated with them – especially when it comes to sensitive geo-political issues. Given the scale of the current controversy, which has reached highest government levels in the two countries, crisis management experts ought to be called in for serious damage control, they advise.

Says ad guru Prahlad Kakkar, “Good business management is all about anticipation, not firefighting. I think it is going to be quite an image issue. In the short term, before memory fades, there will definitely be a shift in consumer preference.”

Brands, he adds, should steer clear of such geo-political issues. “If Hyundai and Kia do not put out a clear diktat about what goes and what does not in advertising, local dealers cannot even be told that they have hurt the parent company. These are international brands, which cannot afford to damage their reputation in a market like India.”

While on social media platforms, boycott calls dominated the narrative around Hyundai and Kia, a Mumbai-based Hyundai dealer who does not wish to be named says on the ground the impact hasn’t been felt, at least not yet. “This is unlikely to have an immediate impact on bookings or sales,” he says, adding, “Even if there are some cancellations, it doesn't make a difference given the long waiting of three months for the models.”

Besides Hyundai, distributors and franchisees of Japanese auto brands including Toyota, Suzuki Motor Corp, Isuzu and Chinese truck brand Faw Trucks also faced a backlash for similar messages posted in Pakistan. Each of them issued apologies or clarifications (see box). As did fast food giants KFC, Pizza Hut and Domino’s. While these posts were later deleted, the damage was done.

“The Hyundai problem was a self-inflicted corporate issue, where a handle which is not the official handle of the company, using the company’s name, created trouble by talking about a sensitive issue,” says Dilip Cherian, image guru and founder, Perfect Relations, a Delhi-based image management firm. “The mistake Hyundai India made was in responding to that tweet, when all it had to do was stay silent because it had nothing to do with it,” he adds.

“Global companies,” says Cherian, “need to put in place rules to ensure that only authorised people can use their brand on social media. Random distributors should not be authorised to use it. It is a basic hygiene factor.” He adds, “Handling crisis communication is a specialist’s task and cannot be left to routine ‘young’ marketing and PR teams.”

An email sent by Business Standard to Hyundai Motor Corp’s headquarters in Korea remained unanswered until press time.

After a statement on Monday, Hyundai India, meanwhile, tweeted Hyundai Motor Corp’s statement on Tuesday morning. It read: “As a business policy, Hyundai Motor Company does not comment on political or religious issues in any specific region. Therefore, it is clearly against Hyundai Motor’s policy that the independently-owned distributor in Pakistan made unauthorised Kashmir-related social media posts from their own accounts.

Once the situation was brought to our attention, we made the distributor acutely aware of the inappropriateness of the action. We have since taken measures to ensure the distributor, which misused the Hyundai brand identity, has removed the social media posts and we have put in place processes to prevent a future recurrence. Our subsidiary, Hyundai Motor India, is not associated with the distributor in Pakistan, and we strongly reject the distributor's unauthorised non-business related social media activity.”

Meanwhile, calling the diplomatic action “just optics”, Samit Sinha, founder, Alchemist Brand Consulting, Delhi, says, “These are the hazards of globalisation. What happens in one country is bound to have ramifications in another. Brands need to be very circumspect about supporting any issue that has the potential to erupt into a controversy, especially in a place which is one of your biggest markets.”

According to latest data released by the Federation of Automobile Dealers Associations (FADA), Maruti Suzuki India and Hyundai India are the top choices for passenger vehicles with a market share of 47.82 per cent and 13.6 per cent in January 2022, respectively.

“It is important for brands to bring in a change at the policy level where anything that is political or religious is to be avoided at all costs and lapses are met with strict and visible punitive measurements,” adds Sinha. 

While Sinha and Cherian agree that the long-term effects of such a “goof-up” are negligible and the controversy will likely blow over in some time, in a global environment of higher sensitivity, this was an avoidable blunder, they say.

For now, what should these brands caught in the eye of the storm do? “Lay low and stay quiet,” advises Kakkar.

Sharleen D'Souza contributed to this report