Hyundai will introduce a rear-wheel-drive luxury car in the US in 2007 to test the potential for launching a luxury brand.
An upscale brand to rival Toyota’s Lexus would help Hyundai get away from its consumer image as a maker of cheap cars.
The US is a more logical place than Europe to launch a luxury brand because Hyundai thinks consumers there likely would be more willing to accept a new high-end marque.
Lexus, introduced in the US in 1990, was the top-selling luxury brand in the US for the fifth consecutive year in 2004, but it struggles in Europe against the likes of Mercedes-Benz, BMW and Audi.
After launching the luxury car, “We will decide whether or not to launch a separate brand,” said Kim Dong Jin, Hyundai’s vice chairman and co-CEO, during the Seoul auto show.
He said Hyundai has a number of issues to settle. For example, the automaker may offer franchises in a new brand only to existing Hyundai dealers in the US, or to dealers who currently do not sell Hyundais.
US Hyundai executives have stressed repeatedly that they would prefer to get a large pickup before luxury vehicles.
But Kim said a luxury car is a “higher priority” for Hyundai than a pickup. A luxury car would “improve our brand image” in ways that a pickup would not, he said.
A spate of upcoming vehicle redesigns should succeed in building the Hyundai image, “then naturally, a customer wants a luxury car from Hyundai,” said Brandon Yea, Hyundai’s director of the marketing strategy team. “That’s when we’ll launch a luxury brand.”
Hyundai hopes to sell 1 million units annually in the US by 2010. Hyundai and affiliate Kia sold a total of 688,670 units in the US in 2004.
Hyundai currently sells no rear-drive car.