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.