Is the world ready for a $69,000 Hyundai? .
In the 1970s, Hyundai Motor Co. started with the Pony subcompact. Now, the Korean automaker is entering the 21st century with the Equus, a car designed to compete against luxury flagships such as the BMW 7 series and the Mercedes S-class sedan.
Carefully sidestepping mainstream markets in the United States and Europe, Hyundai will test demand for top-end luxury cars in emerging markets this year.
The Equus comes packed with high-tech wizardry, a testament to Hyundai's technical maturity. Mitsubishi Motors Corp. developed the Equus engine's direct injection fuel system, but Hyundai did most of the remaining design work.
While Hyundai's engineers guided Equus' development, the company flip-flopped on its marketing plan.
Initially, former Chairman Chung Mong-Gyu mapped out a plan to market Equus as a stand-alone luxury brand. Thus, Hyundai would emulate Lexus, Acura and Infiniti.
The automaker abandoned that plan after dealers balked at the high start-up costs and low initial volumes. Management had just about given up on plans to export the Equus when company Chairman Chung Mong-Koo took the helm last spring.
He decided to export the Equus worldwide, arguing that it would build the image of Hyundai's product range. Company officials speak of a trickle-down effect on less costly models.
'When our buyers see that we can build a car as technologically sophisticated as the Equus, they'll be more inclined to buy our intermediate cars like the Sonata and XG,' said a Hyundai spokesman.
Critics wonder whether Hyundai can command a $30,000-plus price, especially in the United States and Europe. In the domestic market, the Equus is a hot seller.
Although Equus was billed as a joint development project, Hyundai says it handled 90 percent of the vehicle design. For example, Mitsubishi stylists visited Hyundai only twice. They requested two design changes: a restyling of the alloy wheels and the rear combination lamp. The interior styling is 100 percent Hyundai's.
Launched in the domestic market in the spring of 1999, the successor to the Hyundai Dynasty and Mitsubishi Debonaire comes in a choice of two body styles. Customers can choose a standard sedan or a limousine. Two engines are available: the 3.5-liter V-6 Sigma engine and the all-new 4.5-liter V-8 Omega.
High-tech gadgetry includes six airbags, a computer-controlled vehicle stability system and an onboard navigation system. Hyundai spent 55 months designing the car, an unusually long period compared with the 25 to 30 months required to design most vehicles.
The Equus' one unique feature is the V-8 Omega, the world's first V-8 engine with gasoline direct injection. A newcomer to direct injection, Hyundai relied heavily on Mitsubishi's expertise. The Japanese automaker has applied direct injection across a wide range of gasoline engines.
Direct injection promises better fuel economy, higher power and lower emissions. The ultra-lean fuel mix yields a 30 percent boost in fuel economy and 10 percent more power.
However, the system is burdened by technical complexity. Intricate plumbing is required to boost the fuel pressure. The system also generates an irritating pulsating noise, which in turn requires extra sound dampening.
The third drawback is high cost. Hyundai believes the cost of direct injection can easily be passed on to a luxury car buyer, while small-car buyers might be resistant.
Hyundai has stayed away from variable valve timing technology on the Equus, but engineers have admitted that variable valve timing is in the wings, awaiting introduction at a later date.
The Equus gets a five-speed automatic, which is augmented by the H-Matic option. H-Matic was developed with the help of Porsche engineers. However, Porsche will not let Hyundai use its Tiptronic brand name.
Mechanically, it's a standard setup with MacPherson struts up front and a multi-link design in the rear. Ride height is automatically adjustable. The car's Vehicle Dynamic Control technology reduces the possible loss of control during cornering. The car also has a tire pressure warning system.
The rear seat console includes jacks for plugging in video game players, DVD players or other electronic gear.
In Korea, the Equus is an import fighter. Prices range from 37 million won ($32,000 at current exchange rates) up to $69,000 for the stretch limousine. Hyundai expects to sell about 20,000 units a year.
Hyundai expects to benefit from economies of scale by supplying sheet metal, trim, engine and powertrain for Mitsubishi's version of the car.
Ready for Japan?
In the late 1980s, critics often attacked Japanese carmakers' manufacturing operations in North America for selling as 'Made in U.S.A.' cars that, in the critics' eyes, had too little American content to qualify for that designation.
Indeed, the U.S. Congress eventually passed a label law requiring carmakers to give the origin of the parts in their cars.
Fortunately for the Mitsubishi Dignity, the label law doesn't apply in Japan. The Dignity, which Mitsubishi is billing as 'the only full-feature limousine made in Japan,' shares 85 percent of its parts with the Equus.
A sister vehicle, the Proudia, shares up to 60 percent of its parts with the Equus in the Proudia's V-8-powered version. The V-6 version of the Proudia shares up to 40 percent of its parts.
Hyundai supplies 250 separate parts for the Proudia and Dignity. These include body panels, the chassis frame, the fuel tank and the automatic transmission for the V-8 engine. For the V-8 direct-injection engine itself, Hyundai supplies the cylinder block, crankshaft, pistons and camshaft.
For the Dignity alone, Hyundai also supplies the radiator grille, headlamps, fog lamps, front bumper and roof. Both cars are assembled at Mitsubishi's assembly plant in Ohe, Japan. They went on sale February 1 in Japan.
The Dignity is the largest sedan that Mitsubishi makes, measuring 5,335 mm long. It is 285 mm longer than the Proudia, with most of the added room devoted to a larger rear-passenger compartment.
Mitsubishi aims to sell 300 Proudia and Dignity sedans monthly. Prices start at 10 million yen for the Dignity, or $95,140, and $43,810 for the base Proudia.
Luxury touches on the Dignity include a front grille that is wider than that on the Proudia, built-in body-massage vibrator in the rear seat, fold-away wooden table, magazine rack and either a beige or gray two-tone interior.
The V-8 engine uses an aluminum cylinder block, a first for a Mitsubishi engine. Both cars also offer Mitsubishi's Driver Support System, which incorporates rear quarter monitoring, preview distance control and lane departure warning.
Cameras mounted at the rear of the car track vehicles approaching from the rear. When the driver operates the turn signals, the system sets off an audible alarm and displays a warning if it judges an approaching vehicle to have entered the danger zone.
Another high-tech feature is a cruise control that automatically slows the car if it overtakes another vehicle too quickly.
Another camera is fitted to the rear-view mirror to monitor dividing lines on the road. When the system judges the vehicle is inappropriately departing its lane, it urges the driver to take action by sounding an alarm, displays a message and causes the steering wheel to vibrate.
The Proudia's name was created by combining the English word 'proud' with the Mitsubishi Group's diamond logo.