SEOUL -- Hyundai Motor Co. has decided not to spin off the Genesis or Equus nameplates to create a premium luxury brand along the lines of Lexus.
The reasons: High cost and possible damage to sibling nameplates.
"There are no plans for Hyundai to make a separate brand," Vice Chairman Shin Jong-Woon said in an interview last week at Hyundai headquarters here.
There had been speculation in recent months that South Korea's biggest automaker would follow Japanese rivals Toyota Motor Corp. and Honda Motor Co. in creating an upscale line.
Spokesman Frank Ahrens said executives worried it would cost too much and undermine the image of other models, at a time when Hyundai is trying to position its entire lineup as "modern premium."
Said Ahrens: "It's expensive -- dealerships, marketing, all those things. You don't just spin it off at no cost.
"Secondly, you've heard us talk a great deal about trying to raise the brand perception. And that's perception for all the vehicles. So how would it help the brands if we were to cut off our top level? We are hoping they will help lift the whole brand."
A more realistic and cost-effective alternative to a new brand would be fleshing out Hyundai's upper range with more models and variants, Ahrens said.
Carving out luxury lines from existing brands has had mixed success.
Toyota scored big by rolling out the Lexus brand -- now the best-selling premium brand in the United States. But Honda's Acura brand, the first of the Japanese spinoffs in the United States, has had trouble gaining traction.