Hyundai's low price days over as technology and style boost the brand's value

Hyundai's brand positioning and mission are shifting.

As the nation's 800 Hyundai showrooms fill with high-tech vehicles powered by cutting-edge drivetrains and sporting head-turning style, the automaker is moving further and further away from its roots as a brand that succeeded by undercutting competitors on price.

Hyundai, launched in the United States in 1986 as a "value" brand, steadily built its sales juggernaut by winning customers who shopped for lower sticker prices.

Those days are ending. Vehicles such as the electric Ioniq5, Nexo fuel cell crossover, Palisade SUV and upcoming electric Kona crossover are priced competitively with similar vehicles.

Kevin Reilly, Hyundai National Dealer Council chairman, said the brand is well along in its journey to what he calls a valuable brand.

"The way Hyundai provides value to customers is not so much having a lower transaction price," said Reilly, "but what it gives customers in terms of styling and content for that particular dollar."

He said Hyundai's 10-year warranty has been instrumental in wooing customers from Toyota, Honda, Nissan and others.

Reilly, whose father opened one of the first U.S. Hyundai stores in 1986, doesn't think the company's move upmarket will leave the door open for new value brands to establish a foothold.

He is not worried it will present China's rising auto industry — which is now selling globally in Europe, South America and Asian countries — with an opening.

"I would say emphatically no," Reilly said. "Just knowing the passion that drives the whole Hyundai network, from Korea to America, and how forward-thinking they are, they never sleep.

"I can text [Hyundai COO] Jose Muñoz on a Sunday and he'll text me right back," he said. "They work 24/7 and they are committed to delivering the best product in the marketplace."

Hyundai's long winning streak has transcended market segments, trends, price brackets and, more importantly, perceptions.

Four Hyundai vehicles can cost north of $50,000 and one, the Nexo, stickers for more than $60,000 — none of which Reilly could have imagined when he started in the parts department at his family's Hyundai dealership as a senior in high school.

"I date back to the beginning of the brand," he said. "To help pay for college, I sold Hyundais brand new. So I am very familiar with the Hyundai that was, which was just the Hyundai Excel with a 60-hp carbureted engine.

"I take a special pride in the transformation of the brand. If someone told that 18-year-old that in 23 years his wife would be driving a Palisade and he'd drive something called an Ioniq5 that goes 300 miles on no gas, all electric ..."

A decade ago, Reilly said, a Hyundai would sell for about 80 percent of the price of competitive vehicles.

Now, he said, the price is the same. "I have been able to see it just by the customer base that is coming to the Hyundai brand right now, which is completely different than when we were the value brand."