But Hyundai won't give up. Company officials believe they are closer than ever to shedding the brand's inexpensive, small-car image.
In June, Hyundai launched its most expensive car ever with the introduction of the Genesis sedan. The Genesis has a base price of $33,000 for the V-6 version and $38,000 for the V-8. With options, the V-6 goes as high as $40,000 and the V-8 for $42,000.
The Genesis is Hyundai's first rear-wheel drive vehicle and its first to be powered by a V-8. It is also the company's most expensive vehicle program: $760 million, including $260 million for the new V-8 engine.
For Hyundai this is an important step. Executives are trying to raise the brand's esteem and further distance it from sister brand Kia.
"The average MSRP of cars sold in the U.S. this year is $32,800 with lots less technology than Genesis," says John Krafcik, vice president of product planning at Hyundai Motor America. He says the Genesis is priced thousands of dollars less than a comparably equipped Infiniti, BMW, Lexus and Mercedes.
The basics: The five-seat Genesis sits on a 115.6-inch wheelbase and is nearly 196 inches long. The base 3.8-liter V-6 churns out 290 hp. The standard six-speed transmission also can be operated manually. Fuel economy is 18 mpg in the city and 27 on the highway.
The 4.6-liter V-8 produces 375 hp and gets 17 mpg in the city and 25 on the highway. That's a good combination of power and fuel efficiency when measured against major competitors. The 109.4 cubic feet of interior space is the same as that of a Mercedes-Benz S class.
|How Genesis compares|
|Hyundai executives say the Genesis will compete with the Pontiac G8.|
|2009 Genesis||2009 Pontiac G8|
|Wheelbase||115.6 in.||114.8 in.|
|Length||195.9 in.||196.1 in.|
|Width||74.4 in.||74.8 in.|
|Height||58.1 in.||57.7 in.|
|Curb weight||3,748 lbs.||3,885 lbs.|
|Base engine||3.8-liter V-6||3.6-liter V-6|
|Horsepower||290 @ 6,200 rpm||256 @ 6,300 rpm|
|Torque, lbs.-ft.||264 @ 4,500 rpm||248 @ 2,100 rpm|
|EPA mpg||18 city/27 hwy.||17 city/25 hwy.|
"That has been the key to providing the comfortable ride and handling," Collins says.
Standard features include a push-to-start button, electronic active head restraints, electronic stability control, traction control, eight airbags, ABS with electronic brake force distribution and Bluetooth. Options include Hyundai's first rear backup camera, front and rear parking sensors, HID adaptive front lighting and a 528-watt, 17-speaker Lexicon stereo system that Hyundai says is featured only in the Rolls-Royce Phantom.
What Hyundai says: "We've done our product work," Krafcik says. "All we're doing is bringing people to the truth — the quality, residual value and safety technology."
Shortcomings and compromises: The Hyundai name, which has not been associated with vehicles in this price category.
The market: Hyundai executives say the Genesis is equal to or better than such nameplates as the Lexus GS, Infiniti M, BMW 5 series and Mercedes E class. But they also know that luxury buyers do not connect with the brand. So the vehicles being targeted are the Chrysler 300, Pontiac G8, Lexus ES 350 and Cadillac CTS.
Michael Deitz, Hyundai product planning manager for the cars, says the Genesis "is a natural progression" for the brand, since most Azera and Veracruz sales are for expensive trim lines. The Azera's list price tops out at $29,245, and the Veracruz tops out at $36,445, including shipping.
The primary customer is a college-educated male under age 55 with a household income of more than $100,000.
The skinny: Hyundai wants to sell 30,000 of the sedans annually, but the premium market is shrinking because of high gasoline prices. Hyundai will have a hard time taking share.