Hyundai luxury ready to roll
Production version of Genesis concept will come to U.S. next year with RWD and 300-plus hp engine.
By Peter Valdes-Dapena, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) -- South Korean auto maker Hyundai will unveil a large V8-powered luxury car at the New York Auto Show in early April. While the Genesis is officially a concept car, a production version will go on sale in the U.S. early next year, the company said.
"When it arrives in 2008, it will catapult Hyundai into competition against some potent rivals, and Genesis is up for the challenge," Hyundai Motor America chief operating officer Steve Wilhite said in an announcement.
The car's size and power put it in competition with cars from BMW, Cadillac and Mercedes-Benz.
Hyundai has, for many years, sold large rear-wheel-drive sedans in its home market of South Korea. The production version of the Genesis concept will be sold in South Korea and other markets as well as in the U.S.
The Genesis concept will be powered by a 4.6-liter V8 engine capable of producing "well over 300 horsepower," the company said. Power will go to the car's rear wheels through a six-speed manually shiftable automatic transmission.
A V6 engine will be standard in the production version, said John Krafcik, Hyundai Motor America's vice president for product development and strategic planning.
The car will be available with leather seats that are both heated and cooled. Other available features will include active cruise control, a system that uses radar to maintain a set following distance behind other cars on the highway.
Hyundai executives feel that consumers are ready for a premium offering from the brand.
Hyundai has already improved its market position over the last several years, company executives say, from being, at best, unknown to being seen as a viable alternative to brands like Honda and Toyota.
Now, they feel, Hyundai can take another step.
"We've had a couple of signals that it is ready," said Krafcik.
Krafcik pointed to sales of the company's Azera sedan. The Azera, a lower-priced competitor to Toyota's Avalon, is currently Hyundai's biggest and most expensive car. Prices for the Azera start at about $25,000.
More than 85 percent of Azera buyers opt for the top-of-the line Limited trim level, Krafcik said. Thirty to 40 percent get the fully loaded Ultimate package which brings a price tag of over $30,000
Unlike Toyota, Honda and Nissan, which each created separate luxury brands that are sold at stand-alone dealerships, Hyundai will not create a separate brand for the Genesis car. (The production car's name has not been finalized, Hyundai says.) It will be badged and sold as a Hyundai.
That's because Hyundai isn't chasing typical luxury car buyers, Krafcik said. Instead, the Genesis is for those who eschew paying money for a badge, he said.
"We call these guys the confident non-conformist," said Krafcik.
An automotive oxymoron?
Some outside experts fear Hyundai may be chasing a mythical being.
"It's almost an oxymoron: a value-oriented luxury car shopper," said Jack Nerad, managing editor of Kelley Blue Book's KBB.com Website.
Nerad formerly worked in public relations for Hyundai's sister-company Kia.
"What most luxury car shoppers are after - whether they will tell you this or not -is prestige," said Nerad.
Karl Brauer, an editor and columnist for the automotive Website Edmunds.com, thinks Hyundai can succeed with the Genesis but the car likely won't take sales away from the likes of BMW and Mercedes-Benz.
The buyers of a large Hyundai car could be "the group that can't afford whatever they want but who still want luxury," he said.
He points to the Chrysler 300 as a car currently that appeals to that group.
"[The 300] didn't appeal to traditional luxury buyers," Brauer said. "It appealed to nonluxury buyers who liked the idea of getting some luxury"
Hyundai still faces the challenge of simply executing the car well enough to get around consumer skepticism, Nerad pointed out.
On paper, the Genesis concept has measurements, specifications and technology that match or beat competitors costing much more money. Putting all of those factors together in a package that pleases the senses of finicky buyers will be a challenge, especially on a budget. Handling, quietness, a smooth but controlled ride and a comfortable, handsome interior can't be easily faked.
Krafcik is confident that Hyundai can do it.
"The good news is that, for cars like Genesis, there's absolutely no compromise between our cars and the premium cars," he said.