Korean automakers begin a move upmarket

With Hyundai Motor Co.'s Icarus-like rise and fall in the American market in the late 1980s as the model, it seemed likely that Korean automakers would forever be relegated to the role of producing cheap cars for customers that no other automakers wanted.

  • Japan's product avalanche continues

  • Our look at future products

  • What do the styling terms mean?
  • Look again. The Koreans have become a half-a-million vehicle force in the American market on the basis of new vehicles, improved styling and improving quality.

    No longer does Hyundai sell only bottom-rung Accents. It has a $25,000 sedan going toe-to-toe with the Toyota Camry and Nissan Maxima, as well as a Santa Fe sport-utility that is winning consumer surveys. Both the Elantra and Sonata have been moved slightly upmarket.

    Kia Motors Corp., which was on the verge of being liquidated only three years ago, has found strength since being acquired by Hyundai in 1998. Last year's spate of new products is followed by a minivan that should give the big players pause. It looks as if it could have been styled by Ford.

    In contrast, the future of insolvent Daewoo Motor is far from bright. Depending on whether General Motors buys Daewoo, some vehicles in Daewoo's U.S. lineup could disappear, as could the North American distribution channel itself.

    In the meantime, Daewoo is on life-support, and product development expenses have been slashed to the bone.

    Here's a rundown on what the Korean automakers plan for the U.S. market for the 2002-2005 model years.

  • Daewoo

    Lanos and Nubira: With development funds all but frozen, changes in the next several years likely will be limited to fascia tweaks and color changes.

    Leganza: Daewoo's top-of-the-line sedan will be dropped at the end of the 2002 model year to make way for the Magnus.

    Magnus: The Leganza replacement will be larger and equipped with a 180-hp 2.5-liter inline six-cylinder engine. A $20,000 price tag is projected for the top-of-the-line model. Production starts in June 2002, with U.S. sales expected to begin around September 2002.

    Rezzo: This five-seat mini-minivan already is on sale in Korea, but a U.S. launch is not scheduled until October 2002. The base engine likely will be a 2.0-liter four-cylinder. Daewoo is conducting an Internet contest to name the vehicle for the U.S. market.

    Korando and Musso: These Ssang-yong sport-utilities have been promised to Daewoo's American dealers. But Daewoo no longer controls Ssangyong, so their arrival here is not certain.

  • Hyundai

    Accent: The subcompact gets a fascia change this fall that does not appeal to Hyundai's U.S. executives. A full redesign debuts for the 2005 model year.

    Elantra: The car was redesigned last fall, so a redesign is unlikely until the 2006 model year.

    Tiburon: The redesigned 2002 Tiburon bows at the Frankfurt auto show in September. A side view resembles a Korean version of a Ford Mustang with a bit of a Mercury Cougar tossed in. The new generation will get some real performance with the addition of a 2.7-liter V-6. The base powerplant is a 2.2-liter inline, four-cylinder engine. A convertible version is under study as a 2+2 or a two-seater.

    Sonata: The redesigned 2002 Sonata will share a platform with the Kia Optima. Although a 2.7-liter V-6 will be the first upscale engine over the base four-banger, expect a quick bump to a 3.0-liter V-6 within the year.

    XG 300: The big sedan was introduced last fall, so a redesign is not planned for several years. However, a larger engine is likely.

    Equus: With a 111-inch wheelbase and 199-inch overall length, Hyundai's home-market limousine is not your typical Korean car. The Equus is available in Korea with a 220-hp V-6 and a 280-hp V-8. Hyundai wants to export the Equus here, but executives in the United States say this market is not ready for a $35,000-plus front-wheel-drive Hyundai. Don't expect it.

    La Vita: There are conflicting reports about whether this mini-minivan will be sold in the United States. The company denies it, but other sources say fall 2002 is the target date for arrival. Components come from the Elantra and Sonata.

    Santa Fe: Hyundai's successful sport wagon was introduced last fall. A redesign may come for the 2006 model year.

    Terracan: Again, there are conflicting reports about the possibility of the Europe-market sport wagon coming to the United States.

  • KIA

    Rio: Kia's subcompact sedan was introduced last year; a five-door arrived this summer. No changes are expected for the next four years.

    Sephia: The

    redesign is slated for the 2006 model year, when it will share a platform with the Hyundai Elantra.

    Spectra: The five-door hatchback is built off the Sephia platform and was introduced last year. No major changes are expected until the 2006 model year at the earliest.

    Optima: This mid-sized Kia sedan shares a platform with the Hyundai Sonata and was introduced last year. A larger engine may be added in the 2004 or 2005 model year.

    Sedona: Call it the shot fired across the bow of the U.S. minivan market.

    With a standard 195-hp, 3.5-liter

    V-6, five-speed automatic transmission, dual sliding doors, power locks and windows, and a starting price of under $20,000, this seven-seat people hauler may shake up things. And it looks American: Some of the styling cues are borrowed from the Ford Windstar.

    Sportage: Kia's 7-year-old sport-utility must wait until fall 2002 for a redesign.

    Compact SUV: Kia next fall will launch a truck-based sport-utility about the size of the Toyota 4Runner. Code-named "BL," it will be powered by the 3.5-liter V-6 used in the Sedona. Although the styling of the lower half of the truck will be edgy and muscular, the greenhouse will be patterned after the Lexus RX 300.

    Pickup: Kia still hopes to introduce a small pickup in the 2004 model year. But Kia officials have said the business case for the truck depends on either of two conditions being met: an end to the so-called chicken tax, a U.S. tariff on imported pickups, or North American production, which would get around the tax. The truck would use the same platform as the sport-utility.

  • You can reach Mark Rechtin at mrechtin@crain.com

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