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Korean carmaker stakes $500M on premium bid with Genesis, but also fills gaps at low end of lineup.
With the launch of its new Genesis luxury sedan, Hyundai Motor Co. has bet a small fortune that it can win over premium car customers in the United States.
The South Korean automaker invested $500 million to produce the Genesis, which promises a level of performance equal to that of Germany's luxury cars at prices starting as low as $33,000.
But Hyundai is not moving away from the larger market for small and fuel-saving models where it has traditionally excelled, a senior official said Wednesday.
In the next wave of vehicles hitting American showrooms starting in the fall, Hyundai will fill gaps at the low end of its lineup, said John Krafcik, vice president for product development at Hyundai Motor America.
In November, it plans to add a five-door version of the Elantra, one of Hyundai's top-selling cars. The other six models Hyundai plans to roll out in the next two years include three entry-level vehicles -- a crossover, a coupe and a car. In 2010, Hyundai also expects to offer a hybrid version of its midsize Sonata sedan.
The new rear-wheel drive Genesis, featuring best-in-class technology and safety features in a stylish package, "casts a clear halo on all of our products," Krafcik said.
But a well-designed small model also can strengthen a brand, he said, citing Honda Motor Co.'s Fit subcompact as an example. "Cars like the Fit cast a nice glow from below on that whole lineup."
Like most of its rivals, Hyundai has been buffeted this year by a huge drop in demand for large vehicles. Its U.S. light truck sales have fallen 27.9 percent, while its car sales have increased by 9.7 percent.
Overall, the automaker has outperformed the market this year to increase its share to 3.2 percent, moving ahead of the Chrysler, Jeep and GMC brands. Hyundai's smaller sister brand Kia also increased its share to 2.2 percent.
"This year, it looks like we're going to do pretty well, considering where the market is," Krafcik told reporters at a presentation of the Hyundai Genesis.
The car comes with six- or eight-cylinder engines, and prices range from $33,000 to $42,000 depending on the technology and trim levels. Hyundai will launch a lower-price coupe version later this year.
In a full year, Krafcik said sales of 50,000 coupes and sedans "seems reasonable." Hyundai considers the Cadillac CTS, the Lexus ES350, the Pontiac G8 and the Chrysler 300C as the chief competitors of the Genesis. Last year, Cadillac sold 57,000 CTS models.
He said the $500 million spent on the Genesis was "probably the largest investment program" for a vehicle at Hyundai.
In its last effort to move upmarket, however, Hyundai struggled. The Azera, the model right below the Genesis, failed to hit the sales goals set by the company, although it was praised by reviewers when it came out nearly three years ago. Krafcik attributed its difficulties partly to the weakness of the large sedan segment.
Consultant Jim Hossack at AutoPacific Inc. in Tustin, Calif., said it makes sense for the Hyundai-Kia group to push the Hyundai brand upmarket in North America to separate it more from Kia.
"They may be going up awfully fast," Hossack said. "But they're surprised us all more than once," he added, citing Hyundai's rapid quality and sales gains in North America in recent years.
Addressing skeptics who cite the failure of the Phaeton -- the sumptuous VW-brand $70,000-plus luxury sedan -- Krafcik said Hyundai was not running a similar risk with the Genesis. "Our car starts at $33,000. The average MSRP (manufacturer's suggested retail price) of a car sold in the United States is $32,800," he said.
Hyundai makes bet on luxury
M
With the launch of its new Genesis luxury sedan, Hyundai Motor Co. has bet a small fortune that it can win over premium car customers in the United States.
The South Korean automaker invested $500 million to produce the Genesis, which promises a level of performance equal to that of Germany's luxury cars at prices starting as low as $33,000.
But Hyundai is not moving away from the larger market for small and fuel-saving models where it has traditionally excelled, a senior official said Wednesday.
In the next wave of vehicles hitting American showrooms starting in the fall, Hyundai will fill gaps at the low end of its lineup, said John Krafcik, vice president for product development at Hyundai Motor America.
In November, it plans to add a five-door version of the Elantra, one of Hyundai's top-selling cars. The other six models Hyundai plans to roll out in the next two years include three entry-level vehicles -- a crossover, a coupe and a car. In 2010, Hyundai also expects to offer a hybrid version of its midsize Sonata sedan.
The new rear-wheel drive Genesis, featuring best-in-class technology and safety features in a stylish package, "casts a clear halo on all of our products," Krafcik said.
But a well-designed small model also can strengthen a brand, he said, citing Honda Motor Co.'s Fit subcompact as an example. "Cars like the Fit cast a nice glow from below on that whole lineup."
Like most of its rivals, Hyundai has been buffeted this year by a huge drop in demand for large vehicles. Its U.S. light truck sales have fallen 27.9 percent, while its car sales have increased by 9.7 percent.
Overall, the automaker has outperformed the market this year to increase its share to 3.2 percent, moving ahead of the Chrysler, Jeep and GMC brands. Hyundai's smaller sister brand Kia also increased its share to 2.2 percent.
"This year, it looks like we're going to do pretty well, considering where the market is," Krafcik told reporters at a presentation of the Hyundai Genesis.
The car comes with six- or eight-cylinder engines, and prices range from $33,000 to $42,000 depending on the technology and trim levels. Hyundai will launch a lower-price coupe version later this year.
In a full year, Krafcik said sales of 50,000 coupes and sedans "seems reasonable." Hyundai considers the Cadillac CTS, the Lexus ES350, the Pontiac G8 and the Chrysler 300C as the chief competitors of the Genesis. Last year, Cadillac sold 57,000 CTS models.
He said the $500 million spent on the Genesis was "probably the largest investment program" for a vehicle at Hyundai.
In its last effort to move upmarket, however, Hyundai struggled. The Azera, the model right below the Genesis, failed to hit the sales goals set by the company, although it was praised by reviewers when it came out nearly three years ago. Krafcik attributed its difficulties partly to the weakness of the large sedan segment.
Consultant Jim Hossack at AutoPacific Inc. in Tustin, Calif., said it makes sense for the Hyundai-Kia group to push the Hyundai brand upmarket in North America to separate it more from Kia.
"They may be going up awfully fast," Hossack said. "But they're surprised us all more than once," he added, citing Hyundai's rapid quality and sales gains in North America in recent years.
Addressing skeptics who cite the failure of the Phaeton -- the sumptuous VW-brand $70,000-plus luxury sedan -- Krafcik said Hyundai was not running a similar risk with the Genesis. "Our car starts at $33,000. The average MSRP (manufacturer's suggested retail price) of a car sold in the United States is $32,800," he said.
Hyundai makes bet on luxury
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