NÜRBURG, Germany — Encouraged by the promising start of its performance line among demanding European consumers, Hyundai hopes its upcoming Veloster N sports car can improve its perception among U.S. buyers.
The Korean automaker, no longer satisfied with being just a rational choice for penny pinchers, believes injecting its value-oriented image with a dose of high-octane emotion can win over customers who never considered a Hyundai.
"We're fishing in a different pond," said Thomas Schemera, the former BMW executive who heads Hyundai's high-performance vehicle division, while testing continued for the preproduction Veloster N here on Germany's premier proving ground.
The rise of the N brand represents a significant step in Hyundai's evolution as a global competitor and comes at a critical time for the company.
For years, Hyundai's formula was value, surprisingly well-equipped cars sold for a few ticks below the big-name Asian competitors. It solidified that reputation by racing up the quality rankings and backing its products with a long warranty.
But value as a value proposition can have its downside. Customers who vote with their pocketbooks are more prone to switch to a rival brand should they move up in the world or find a more compelling offer elsewhere, reducing a manufacturer's inherent pricing power and profitability.
In Europe, Hyundai has struggled for years to cultivate a more aspirational image despite having launched a line of "i" cars designed with local tastes in mind, such as the i30 compact, which is not sold in the U.S.
But it might now have found the answer in the new i30 N, a hot hatch that packs all the performance features of competitors and then some for a substantially lower cost. It does this by relying on optimized off-the-shelf parts from Hyundai's network of affiliated Korean suppliers rather than expensive brand-name components such as Brembo brakes. In some cases, the discount from the cost of a rival such as the Volkswagen Golf GTI can be up to a fifth of the price.
The i30 N, on sale since September, hit its 2018 full-year sales target by the end of June, and customers ordering the car now won't receive one until next year.
"Initial sales of N products are going beyond expectations," said Schemera. "Almost 3,000 units of the i30 N were sold in the first half of 2018 in Europe."
The model's father, longtime BMW performance car engineer Albert Biermann, believes the second half will be just as solid as the first.
"We can't build enough," he said, adding that the Veloster N will be even sportier than its European sibling in part because of 88 fewer pounds on the ribs. "We have a six- to seven-month waiting list on the car basically everywhere."