Hyundai wants a luxury brand

[bgluckman]

Notice Hyundai's doing the right thing and developing a RWD platform for the brand. ;D

From AutoNews.

Hyundai wants a luxury brand; automaker seeks U.S. debut by 2007

Hyundai says it hasn't decided whether to sell the Equus in the United States.

By PETER CHANGE AND MARK RECHTIN
Automotive News

SEOUL -- Hyundai Motor Co. aims to set up a luxury sales channel in the United States as early as 2007.

South Korea's upwardly mobile carmaker is developing a luxury sedan in a plan to mimic Toyota's Lexus and Nissan's Infiniti offshoots.

"Basically, our plan is to launch a brand that is strong enough to compete with BMW and Audi and Lexus," says a senior executive in South Korea. He says Hyundai wants to establish the channel in the United States "in three or four years."

Hyundai's quality has improved, and its U.S. sales are rising. Sources at Hyundai Motor America say parent company executives believe the time is right for a prestige brand.

"It's more a question of when, not if," says a Hyundai Motor America official who asked not to be identified. "Hyundai's next generation of Korean-market luxury cars is arriving in 2007. They don't want to wait for the generation after that to launch a luxury brand in America."

Hyundai engineers are tearing apart BMW and Mercedes models to better understand European luxury cars, according to the U.S. insider.

"We are now developing a 3.5-liter rear-wheel-drive luxury sedan that will be offered with the luxury brand in the U.S.," says a Hyundai source in South Korea. "The development is in an initial stage in the Namyang r&d center. We hope it will greatly enhance Hyundai's brand image in the U.S. market."

He says the sedan will fill the gap between the rwd, V-8-powered Equus sedan, which is sold in Korea and Europe, and the XG350, which tops Hyundai's range in the United States. The new model will be sold in the United States and Europe through a Lexus-like channel. But it will not be the only model in the luxury lineup.

A high-line sales channel long has been an element of Hyundai's U.S. expansion plans. Now Korean executives think it is time to act. Sales have been growing, and Hyundai's brand image got a big boost from a strong showing in the J.D. Power and Associates Initial Quality Study in April.

Another Hyundai Motor America official - who declined to be named - was cautious about the time frame. He called a 2007 launch "optimistic" and said it could occur as much as two years later. He says Hyundai Chairman Chung Mong-Koo is aware the main brand still needs time to build credibility in the United States.

"But there's only so far we can go with the Hyundai brand," the official says. "To be a full-service car company that wants to be in the global top five or six automakers, we have to go upmarket. There's money to be made there. It's just that there's a ceiling for how much someone will pay."

Although South Korean executives have mulled the idea for a long time, Hyundai officials in the United States have been reluctant.

"Hyundai Motor America has been able to forestall it until now, but the Americans will probably get a luxury brand before we're really ready for it," according to a U.S. source.

But he adds: "The Koreans are not fools. They know the financial challenge and marketing challenge of launching a luxury brand here."

The luxury brand likely would have to have at least three vehicles at the outset, the source says. The lineup also might include the 2007 redesign of the 4.5-liter Equus.

Because it is equipped much in the Korean style, the current Equus is not considered ready for the global luxury wars. Engineers are trying to make it more like a BMW or Mercedes.

"Hyundai is trying to make a global luxury vehicle, not the typical Asian luxury boat," a Hyundai U.S. executive says. He says the Equus was delayed from 2005 until 2007 because it was "too Korean."

A Hyundai executive in Korea says Hyundai hasn't decided whether to sell Equus in the United States alongside the new 3.5-liter sedan.

Some U.S. dealers are wary of Hyundai's quest. Don Hicks, who owns Hyundai, Kia, Subaru and Suzuki franchises in the Denver area says it is hard for a luxury brand to take hold.

"A lot of Acura guys came and went in the first wave," Hicks says. "Denver has been able to sustain just one Infiniti store. So we need to learn from history. A standalone facility for a Hyundai luxury car might be a stretch, even though Hyundai has made great strides and gotten great press.

"I'd rather they concentrate their efforts on giving all Hyundai dealers a truck," he says. "I think we could sell more trucks than luxury Hyundais."

[eCkS]

this is pretty interesting... i wonder what they're going to call the new luxury brand..? i really hope we get the next gen Equus here in the states...even if it wont carry badges hyundai badges.. you can always go KDM style...

[megadethmartyrdethmartyr]

Don Hicks doesn't know what he's talking about. He needs to wipe that truck idea out of his head.

[bgluckman]

I agree. Leave the trucks to Kia. Kia needs a pick-up, not Hyundai.

[hjr]

Can not recall if I read it on detnews.com/autoinsiders or thecarconnection.com last month or two, but supposedly by 07, Hyundai will have a "medium" sized truck. They thought about a small truck, but said profits would be nothing( maybe due to truck tariffs of what, 25%? Think that is what it is for imported trucks).
And, we all read the rumors of Hyundai perhaps using the Sorento , and making into a truck to save $$ on R&D.
I did read , also, that they went to Chrysler last year to try to get a Dodge truck, to convert to a Hyundai, but Mitsubishi was supposed to get it instead.

Something like this.

Hey, anyone read carconnection about a year ago, when they showed a decent sketch of a sport car(looked sort of like an upgraded97 tibby) but they said it might be a 30Grand sports car, for "luxury brand"?
never heard anything else after that

Who knows? I recalled my Hyundai dealership back about 2002 said Equus was coming"In December". Never happened.

Who knows what'll happen. I just hope the next gen Sonata is not "Honda/Toyota " priced.

[hjr]

report from thecarconnection.com daily news, 27july04

Hyundai Moving Into Lexus Territory?

Hyundai has upscale plans for its next generation of cars and trucks, according to a report in Automotive News. The industry weekly says the Korean company would like to set up a luxury brand in the U.S. as early as 2007. The brand would be positioned as Lexus is to Toyota. A Hyundai official tells the paper that the plan is more a matter of "when, not if," and that the new channel could launch in tandem with a new rear-drive luxury sedan planned for the Korean market. A new sedan slotted between a rear-drive Korean sedan and the Hyundai XG350 would be the focus of the brand, but the brand would be launched with more than one vehicle, the report indicates.

Spy Shots: '06 Hyundai Sonata by Brenda Priddy (7/19/2004)

What is odd is the "Luxury" sedan, the one to be the main focus , would(possibly?) be smaller than XG350?
Hunh?
They also mention "Trucks" in that first line.

I did read once that Hyundai Motor America did NOT want the Xg300(now XG350, of course), and there were a lot of internet sites doubting the sanity of such a move, but 3 years later, seems they are now saying it was a good move.

Hey, Santa fe;s with the 3.5 liter, etc, are msrp of 25-26K?? Same for Xg;'s, and Amanti is even selling over at Kia. Maybe not a lot, but they are selling. I have seen 2-3 in my"GM country" area of Ohio. One silver and one black. Seen a few on hwy.

I think as long as they start off slowly, and expect sales of less than 100K for a year or three.(3 vehicles).
Unless, of course, they deliver the show cars that even non Hyundai fans were like'they make that, I might buy one"(comments I read before)....then they might take off faster.

[megadethmartyrdethmartyr]

I just don't ever see Hyundai making a truck. No matter whether it's the compact or full sized segments. It's way too much of a controled segment (domestics own it, I don't care what Toyota or Nissan would tell you). A few reasons. 1) It's the only loyalty the Big 3 have left. 2) Hyundai would have to have a U.S. based body of frame plant, they don't and more than likely shoudn't mess around with it. It would never be profitable. 3) Foreign cars have neither the huge incentives nor the desire to kill their resale and names for them. That's how the Big 3 sell trucks. They give them away. Asian companies won't do that, and that is the only way to be succesful in the truck segment.

[hjr]

Kia wants a truck, but said they could not compete due to the 25% import tariffs on body-on-frame trucks.
Kia also stated( I read detnews.com, freep.com, thecarconnection.com, and wardsauto.com, so I forgot which ones had the stories or when, I did post on old t-h-c.org, think around Chicago show time, when Kia had that show truck that sort of looked like f-150, Feb 04?) that if sales hit 300,000 annually in USA, they want to build a small body-on-frame truck plant(Mr Butterfield, KIa USa, said) in USA, and may look next year. It'd build 100,000-150,000 trucks-most for USA, and some for export, I am guessing.

They even went as far as to say the plant would be 2 shifts.
They wanted to make 'em in Alabama, but like you said, they aren't set up for body/frame trucks assembly.

Of course, if they do this, and make 100-000-150,000units a year(for USA), one would guess Hyundai might take advantage of that situation, perhaps, and try selling some rebadged ones(with Hyudnai engines?).

[XHyundai]

I'm with megadethmartyr, I don't think a Hyundai truck is coming any time soon. The big issue is the so called "chicken tax" which adds a 25% tariff on imported pickups. So it would have to be made here and after spending a billion dollars on the Alabama plant, the Koreans will sit back and make sure that the facility can be profitable as it stands before adding additional lines or building a new facility.

The dealers want a truck becuase that is what sells today, but by the time it could be made the market may have changed again.

The original article about the Luxury Brand was in Automotive News (www.autonews.com) and as you have seen shows three vehicles, the Equus, a new sedan between Equus and XG and a third vehicle. I would guess a premium Santa Fe bodied vehicle.

As to name, I hope that Hyundai will find a memorable one. I have often thought that if Hyundai had changed their name back in 99 the company would be doing better today. That HY just scares middle americans. Those letters just don't fit together in the English language. Even the salespeople pronounce it incorrectly. The Hyundai Motor America pronunciation rhymes with Sunday and the Y is silent. If they can't get it, the customers sure don't stand a chance.

X

[duke]

well, there are a few "CENTENIAL" cars here in Canada,
which have 4.5 ltr. V8 DI with 278 HP engines. The car is bigger then the XG, and has all sorts of gadgets like variable height suspension (lovers the ride height the faster the speed), ABS, TC, ESP, GPS, cooler in rear parcel shelf, ………..

I think, that the DE LUX line name (if there ever will be one for north America) would be “CENTENIAL“<br>

[hjr]

TCC'S DAILY EDITION: Feb. 5, 2004



Compact Trucks Get Lots of New Blood

Compact pickup trucks have been playing second fiddle, or perhaps third trombone, to the full-size truck market the past three years. But judging from all the new product hitting the segment, it's clear automakers see potential in "them thar" lightweights.

Kia Motors America on Thursday will showcase its Mojave pickup concept based on the Sorento SUV. Kia wants very much to build the solid-rear-axle truck in North America to avoid the 25-percent "chicken tax," but so far it will remain an idea that Kia CEO Peter Butterfield tries to sell to his Korean masters.

NOTE: The story I read had Mr Butterfield saying that Kia wants this truck thing, with or without Hyundai's help to build it, basically. How? Hyundai owns 51%, that is not quite 100%. Mr Butterfield saaid that if they hit 300,000 sales annually(which they could hit 280,000+ this year, see Wardsauto.com, next Monday, aug2,04, for industry press releases/auto sales for July and YTD) they'd build a plant here if Hyundai did not want to let Kia build at their plant down the road.
_____________________________________
The Mojave is a four-door with no center pillar, allowing seating for four. The rear wall of the cabin retracts at the touch of a button after the rear window is manually folded up and away, stretching the 71-inch truck bed to 86 inches on demand, big enough for a 4x8 sheet of plywood. The truck is powered by a 3.8-liter, DOHC 24-valve V-6 engine putting out an estimated 280 horsepower and 265 lb-ft of torque, coupled with a five-speed electronically controlled automatic transmission.

The obvious solution for Kia is to get together with sister company Hyundai, which also wants to build a light-duty pickup. The trouble is Hyundai likes independent rear suspensions. "Hyundai and Kia are trying to collaborate on as much as we can, but without offering the same product and chasing the same customers," said Hyundai Motor America Robert Cosmai.

If built, the Mojave would be slightly larger than the 2005 Dodge Dakota, a redesign of which debuted Wednesday.

BTW on another site, Hyundai supposedly said 07 for their truck.
why the attack on trucks? I do nto drive one, but if Hyundai and Kia could sell a few and make money, why not?
My Jeep-only drive in law said if they made that Mojave, or soemthing akin to it, in USA< he'd buy it!
hey, that is almost like the devil converting to Catholicism.

[megadethmartyrdethmartyr]

I have not heard any names for the Luxury brand being thrown around yet. However I am pretty sure what ever slots in between the XG and Equus will be a sports sedan, ala Acura TL, Infinti G35. Back to the truck thing. Kia doesn't have the resources or the money to build their own truck. They would need a state side plant to avoid the chicken tax, which you would have to do to compete price wise. Hyundai will not let Kia run rough shod. Their current "screw em, we'll do it anyway" is what got them and bankrupcy the first time and why Hyundai owns 51%. The only Hyundai dealers pushing for a truck reside on the eastcoast. Those guys have no idea the cost involved and total lack of profitablity of a medium sized truck. The current "time table", if Hyundai were to build a truck was 07 as an 08 model. It has been mentioned but with problems Nissan is having with the Titan (quality, and profits), don't count on it at all. There is probably less than a 10% chance of seeing a Hyundai truck. What was meant in that article by "trucks" is mid-size and full size SUV's.