SEOUL -- Hyundai is developing a luxury brand similar to Toyota's Lexus marque, say sources here.
Hyundai would introduce the new brand in 2007 to counter its "cheap" brand image in US and European markets.
A new rear-wheel-drive luxury sedan would lead the brand.
"Our plan is to launch a luxury brand strong enough to compete with BMW, Audi and Lexus," says a Hyundai executive.
He adds that creating a new brand will mean "enormous" development and marketing costs and this will be carefully considered before a final decision is made.