The plan by Hyundai Motor Co.'s top officials to add a luxury model is ambitious. But moving upmarket can be tricky, and the Korean automaker must consider each step carefully.
Hyundai plans to launch a rear-wheel-drive luxury car in the United States in 2007 to see whether there is sufficient demand to launch a full-blown luxury brand. Some Hyundai employees in the United States are leery; they would rather have a pickup to sell.
The biggest Hyundai car sold here now is the XG350, a front-drive, four-door sedan with a base sticker price of about $25,000, which means Hyundai would have to leapfrog a couple of market segments to reach the luxury threshold of $42,000.
Sooner or later, most automakers want a luxury brand with more prestige and fatter profits. But before jumping to grab that ring, Hyundai's brass would do well to remember:
n Toyota was in the United States for 30 years and was an established brand for 15 years before its parent company launched the Lexus luxury marque here in 1989. Nissan Motor Co. waited just as long before launching Infiniti here.
n Although Honda Motor Co.'s Acura was the first upscale Japanese channel in the United States, the brand hasn't achieved the same status as Lexus.
n Mazda Motor Corp. narrowly avoided a foolish foray into the luxury market when it killed plans to launch the Amati channel.
Hyundai's plans to add gasoline-electric hybrid models next year and a rear-drive luxury car the following year may be too much for the automaker to absorb.
