Hyundai Pakistan’s Kashmir day saga

The Gods of the internet bore down on Hyundai and the consequences were not pretty

By Ariba Shahid

It all started, as most chaotic things do in today’s world, with a facebook post. Early in the afternoon on the 5th of February the official Facebook page for Hyundai Pakistan put up a picture commemorating Kashmir Solidarity Day. It was the sort of page that a lot of company pages make to seem relevant and boost their social media presence and forget about without incident. On most days, the post would have gone unnoticed. But the overlords of the internet had other plans. Somehow the facebook post reached a few Indian social media users and they were not amused. The users commented on the post, complaining that Huyndai, which is relatively new in Pakistan and has a massive presence in India, should not be allowing their local subsidiaries to be making what they claimed were politically insensitive social media posts. At some point, someone took a screenshot of the post and put it up on Twitter. The post was quite tame. “Let us remember the sacrifices of our Kashmiri brothers and stand in support as they continue to struggle for freedom,” read the caption. Yet over the course of the next few days the post tempers ran high and the well-meaning post shook the highest echelons in the company's international hierarchy and lit a fire that would spread and burn into a diplomatic nightmare and play a role in Hyundai taking a significant hit on the stock market.

What happened

Hyundai is a big company. The South Korean multinational corporation is one of the largest automobile companies in the world, operating in 6000 dealerships spread across 193 companies of the world with a capacity of producing 1.6 million vehicles a year and a labour force of 75,000 people. Social media proved to be bigger. On Sunday the 6th of February, a day after Hyundai Pakistan posted the Kashmir Day commemoration, the post started to pick up some traction among Indian social media users, and within hours the hashtag “#BoycottHyundai began to trend. Within hours, unverified news reports ran on the Indian media claiming that 3000 bookings for Hyundai vehicles were cancelled in 12 hours.

To put that into perspective, India sold 505,000 Hyundai cars in 2021. In comparison, Hyundai sold a mere 8,000 models in Pakistan in 2021. The 3000 orders that were allegedly cancelled would have accounted for 40% of the total Hyundai sales in Pakistan last year. Normally, companies do have different social media presences in different countries and post in relation to local holidays and culture.

At this point, we do have to say that Hyundai making a post on Kashmir Day was not a big deal. It was something that a lot of companies do. Tuning in to local sentiments is a big part of tapping into a market, and in Pakistan not posting on the occasion of Kashmir Day might have been construed as anti-national. However, the force of the response from Indian social media users was harsh and resulted in a storm that no one could have anticipated and that got out of hand very quickly because of an overblown reaction. It says more about the nature of social media and the internet than it does about social media strategy or any

sort of gaffe. Because this was not a gaffe on the part of Hyundai Pakistan - no - this was a phenomenon on the part of India social media. In this particular case, there was also a massive difference in the size of the markets and the Indians unhappy about the post realised that very quickly.

Hyundai India tried to make a clarification that very day, sharing a post on Sunday the 6th in which it said it has a "zero-tolerance policy towards insensitive communication and we strongly condemn any such view. The unsolicited social media post linking Hyundai Motor India is offending our unparalleled commitment and service to this great country," it said, adding that it stands firmly behind its "strong ethos of respecting nationalism." However, by this point, the conversation had gone far out of anyone’s control.

The statement was too little too late and ended up making things worse, with Indians claiming it did not do enough to address hurt sentiments. By this point, the trend was picked up on by political bigwigs and government officials, and very quickly became a bone of contention to fuel populist rhetoric. Sentiments continued to rise and on Monday the 7th of February, To make matters worse, Hyundai also took serious hits on the stock market on Monday, when its share fell 1.25%, weakening more than Seoul’s benchmark index. The main factors behind the drop were concerns over record numbers of COVID-19 cases in South Korea, and ongoing worries that a global chip shortage could hit production and sales. However, images of the graph of Hyundai stock falling galvanised the boycotters further who thought the boycott was already working.

That very day, the issue was also brought up in parliament by India’s commerce minister, Piyush Goyal, who said that Hyundai needed to be more forceful in their apology and that the government had approached Hyundai and the South Korean government for an explanation.

"This issue has been taken up both with the government there and the company concerned," Mr Goyal said. "They (Hyundai) have already issued a clarification yesterday. We have also asked them to be more forceful in their unequivocal apology on this issue." This voice being raised in parliament was part of a larger trend. Earlier, Priyanka Chaturvedi of Shiv Sena said certain companies have been offering support and "posting content on Kashmir solidarity day observed by Pakistan". According to her, the companies do business both in India and Pakistan, and "yet have posted content in solidarity with Pakistan over Kashmir."

The calls for explanations continued to rise, with the demand going beyond a simple apology, and now asking for the South Korean car manufacturer to take a clear stance on the political issue. Ashwani Mahajan, an official at the economic wing of the Rashtriya Swayamsevak Sangh (RSS) group, said Hyundai should clarify its position on Kashmir. "While not criticising @HyundaiPakistan, the Indian arm of @Hyundai_Global is not even saying that Kashmir is an integral part of India. Speaks tons about their commitment to India. Doesn't this call for #BoycottHyundai?", he said.

Shiv Sena MP Priyanka Chaturvedi called on the automobile manufacturer to avoid “wishy-washy words” and say “we are unequivocally sorry”. BJP’s foreign policy in-charge, Vijay Chauthaiwale, also asked the carmaker to explain the company’s “global stand on anti-India rhetoric”.

The entire matter culminated on Tuesday the 8th of February, when South Korea's Hyundai Motor said it deeply regrets any offence caused to Indians by an "unauthorised" tweet from the account of its Pakistan partner that expressed solidarity for the people of Indian-occupied Kashmir (IoK). After the widespread backlash to the earlier clarification, this one was unequivocal. It also became clear where Hyundai stood when Hyundai Pakistan removed the original post.

In its new statement, the company said it was “clearly against” its policy that the an independently-owned distributor in Pakistan made “unauthorised” Kashmir-related social media posts from their own accounts. It also said that its Indian subsidiary is not associated with the distributor in Pakistan.

“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,” the company added.

In short, the Pakistan distributor of Hyundai posted a Kashmir day post on Saturday. By Sunday Indians were upset and #BoycottHyundai began trending. When Hyundai India responded on the same day, people demanded a stronger statement, and the Indian commerce minister said the same in parliament on Monday. By Tuesday, Hyundai’s headquarters in Seoul offered a more detailed apology, but the matter was not over yet - because now the South Korean government was about to get involved as well.

The diplomatic spillage

One can imagine that the top executives over at Hyundai’s Seoul headquarters will be annoyed. Pakistan is a new market. A very new market. And a facebook post from there resulted in them having to apologise to the people of India and contain a crisis that could have jepordised their largest market.

Yet it was not just the danger of what might go wrong in terms of business, but also the South Korean government breathing down their necks. On the 8th of February, the Indian Ministry of External Affairs (MEA) summoned the South Korean ambassador on Monday to convey the government's "strong displeasure" over the social media post.

According to Indian news agency ANI, the Indian external affairs minister also discussed the post with his Korean counterpart on a telephone call. "While they discussed several issues, the [Korean] foreign minister also conveyed that they regretted the offence caused to the people and Government of India by the social media post," according to a statement of the MEA shared by ANI. In addition, India's ambassador to Seoul contacted the Hyundai Headquarters to seek an explanation, the statement added.

In response, the South Korean foreign minister reportedly expressed regret after India summoned the Republic of Korea envoy to lodge “strong displeasure.” While officially nothing more was said other than that the two foreign ministers “discussed” the issue on a call, it does seem that the social media storm ended up resulting in a brief diplomatic kerfuffle that quickly thawed.

What has been happening in Pakistan?

The post has been removed, and there should be no love lost towards Hyundai Pakistan given the immense pressure. The Kashmir issue is a sensitive one and tempers run high on both sides of the border. If India gave flack to Hyundai India for a post made by Hyundai Pakistan, what could the possible repercussions be in Pakistan over Hyundai Pakistan removing the post? For now it seems that there have not been any, since Hyundai is nascent and very small in the country. In fact, while Indian twitter users dominated the conversation, their counterparts in Pakistan supported Hyundai Pakistan for their post.

“Who said we removed the post? It was taken off after Kashmir day was over like any other post,” claims Mian Hassan Mansha, Chairman Nishat Mills Ltd - the company that has partnered with Hyundai in Pakistan. “We have many social media posts coming off and on. I am sure you might have noticed. It does not make sense to keep an old dated post up unless it is for marketing or product

information.”

Interestingly, the entire kerfuffle comes only a little while after Mian Muhammad Mansha, the CEO of Nishat Group, made a statement in favor of renewed and better trade relations with India. “If things improve between the two neighbours, Indian Prime Minister Narendra Modi could visit Pakistan in a month,” Mian Mansha told a gathering of businessmen at the Lahore Chambers of Commerce and Industry on Wednesday, just three days ahead of Kashmir day.

He advised the two countries to resolve their disputes and start trade to fight poverty in the region and used the example of European nations as a role model. “If the economy does not improve, the country may face disastrous consequences. Pakistan should improve trade relations with India and take a regional approach to economic development. Europe fought two great wars, but ultimately settled for peace and regional development. There is no permanent enmity,” said the older Mansha.

The most immediate effect in Pakistan, however, was that other international chains operating here scrambled as their Kashmir Day posts started getting attention too. Again, normally these posts would have gone unnoticed but because of this incident a lot of companies tried to correct the course. The entire incident may result in foreign franchises keeping a closer look on the social media activity of their local subsidiaries.

Several large multinational brands, including Pizza Hut IncDomino's Pizza Inc. and Yum Brands Inc.’s KFC, trended on social media in India on Tuesday, with calls for boycotts after some of their affiliates in Pakistan posted support for people in the disputed region of Kashmir. KFC India and Domino’s in India apologised for the post on Monday. Hyundai India said it took steps to remove the posts made by an “independently-owned distributor” in Pakistan. Many of the tweets were unavailable by Tuesday, even though Twitter users continued to post screenshots, keeping the issue as the main trending topic in India over two days this week, according to Bloomberg. "We deeply apologize for a post that was published on some KFC social media channels outside the country. We honour and respect India, and remain steadfast in our commitment to serving all Indians with pride,” said KFC in a tweet.

Pizza Hut, in its statement, said "it does not condone, support or agree with the contents of a post circulating in social media. We remain steadfast in our commitment to serve all our brothers and sisters with pride."

Other global brands such as Osaka Batteries, Isuzu D-Max, Bosch Pharmaceuticals, Atlas Honda Limited, Kia Motors Crossroads, and Dominoes also made similar posts and are facing calls from some groups within India for boycotts.

Hyundai in Pakistan and India

Because the issue with Hyundai was the major trigger for the outrage and caused a diplomatic issue between India and South Korea, we’re going to look at the market dynamics for Hyundai in both countries.

In 2017, Hyundai re-entered the Pakistani market by partnering with Nishat Mills. The company used to assemble cars in Pakistan until 2004 through a partnership with Dewan Farooque Motors. They stopped when the latter went bankrupt. The Hyundai Elantra, Sonata, Tuscon, and Porter H-100 are manufactured locally. The Grand Starex,

Santa Fe, and Loniq are imported.

On the flipside, Hyundai Motor India is a wholly owned subsidiary of the Hyundai Motor Company headquartered in South Korea. It has been operational in India since 1996. The operations have grown so large that the subsidiary not only produces for the local market but also exports to 92 countries across Africa, Middle East, Latin America and Asia which has earned it the title of being India’s number one exporter for the last 10 years consecutively in the early 2010s.

Hyundai is the second largest car manufacturer in India and has captured 14.93%. Maruti Suzuki remains the biggest player. However, both Maruti and Hyundai are losing out on market share as Tata gains a bigger share of the pie.

Why does South Korea care about India?

There is also no sugar coating the fact that the Indian economy is vastly bigger than Pakistan’s. It is the world’s sixth largest economy by nominal GDP and the third largest by purchasing power parity. Moreover, the very fact that the stock for Hyundai Motor Company tumbled in South Korea over this issue shows how serious the matter is. The stock fell 4.15% over the past 5 days, roughly 8000 points. If we compare Hyundai in both countries, it is evident that India is clearly a bigger stake for Hyundai considering they’re directly the producers there in contrast to the joint venture operations they have in Pakistan. Moreover, Hyundai India sold 32,312 vehicles in December 2021 compared to 8903 Hyundai Vehicles sold in Pakistan in a year. For more insight of the sheer difference in the size of the markets, 237,424 vehicles were sold in 2021 in Pakistan compared to 505,033 Hyundai cars sold throughout 2021 in India. What this means is the Hyundai India sales for 2021 are more than double of the entire auto sector of Pakistan. However, with Hyundai’s share already shrinking in India as Tata gains more ground, Hyundai is already worried about its placement in India. With calls for boycotts adding to the decrease in market share, there is no surprise that Hyundai global is concerned.

Can brands be patriotic?

This raises the question, can global brands be patriotic in one country in light of their global presence?

Danish Ejaz, CEO of Madvertising has mixed views about brands and their displays of patriotism. “Generally, brands tend to speak the consumer mindset of the respective country if they are not educating customers about the brand. In that aspect, yes, brands must be patriotic. But that is more aligned with local brands. Big brands tend to be diplomatic considering their presence in multiple countries and they usually avoid events that can cause issues to other

(bigger) markets which can cause a huge dip in their sales if they go against them.”

While it is easier to exist in peaceful nations, it is also easier for brands to be patriotic in such nations. However in the case of Pakistan and India, it is not that easy.

Ejaz explains, “This is where the tricky situation comes for global brands, specifically present in Pakistan & India. If you take Pakistan's side, you are automatically opening yourself for a huge backlash from India. Which we all know is a bigger market and no brand wants to mess with them!”

Being a Kashmiri and a social media strategist, his opinion on the matter is one that should be heard. He adds, “In this specific regard, the issue is whether you want to talk about the ‘narrative’ or do you want to talk about what you feel? In general, all the posts on Kashmir day were focused on solidarity with Kashmir and its citizens but can we talk about something else? The stance about Kashmir in Pakistan is very rigid and that is why it is not possible for brands to talk about anything else. In the future perhaps, we may get something but right now it strictly highlights the injustice on the other side, and a means to show solidarity with Kashmir.”

“For global brands the best strategy is not to talk about it which they have been doing every year silently and only this time we have noticed due to the recent incident.” Kashmir day is not a new holiday or a knee jerk reaction to the current India Pakistan relations. Kashmir Solidarity Day or popularly known as Kashmir Day is a national holiday observed in Pakistan on February 5 every year. It’s an annual day to show support and unity with the people of Indian-administered Jammu and Kashmir. It is also a day to pay homage and respect to the Kashmiris that have lost their lives as a result of the conflict. The holiday is a fairly young one and was first proposed by Qazi Hussain Ahmed, former Emir of Jamaat-e-Islami Pakistan in 1990. In 1991, Prime Minister Nawaz Sharif called for a Kashmir Solidarity Day Strike. It was titled Kashmir Solidarity Day in 2004. The fact that a Kashmir day post was taken this seriously this year could be explained by a number of reasons. One could be growing intolerance towards Pakistan in India as a political gimmick to garner more support. Hussain Nadeem, the executive director of the Islamabad Policy Research Institute, a think tank that works on International relations say ”the Indian government reaction is reflective of the deep rooted insecurity and state of crisis that engulfs India at the moment where no critique is tolerated. We witnessed this in how India bullied the social media companies to obey the censorship rules and we see the same attempts on corporate brands.” “Communal violence is out of control and with elections in India right now, the government is desperate, hence all of these over the top measures,” adds Nadeem. However, there is more to it. For instance, Hyundai Pakistan had just restarted sales in Pakistan after more than a decade. The company’s presence on social media was meager. Similarly, brands like Pizza Hut in Pakistan revamped their social media operations as well over the past year. Thus they got more traction than they probably would have a year ago or even earlier.

Social media strategies rethought

This whole ordeal points out that social media strategies need to be planned, coordinated on a global scale, and thought out well. More importantly, at a time when you can get cancelled at a click of a button, Pakistani brands need to improve their communications and their messaging. You can no longer just wing social media. It is as important as your on ground marketing in this day and age. For now, Hyundai sales in Pakistan remain untouched as a result of the issue, but what it means for the future in the larger scheme of things is yet to be seen. n