Hyundai
is reaching for the top in launching a new luxury brand, Genesis, which aims to
replicate the success of Japanese rivals while redefining the customer
experience.
The
Korean automaker unveiled its flagship sedan, the G90, at the Detroit auto show
Monday that was designed to compete with the top offerings of storied brands
like Mercedes and BMW by offering best-in-class performance and features.
"We
are applying ourselves to entirely new objectives to set the benchmark for
luxury," Hyundai vice chair Eui Sun Chung said at the brand's US launch.
"With
Genesis we will strive to meet the desire of a new generation of luxury
customer... (who) value unique experiences over mere status."
The
bold move comes after years of studious planning and work to improve Hyundai's
reputation following a disastrous initial entree into the US market in 1986
with the poorly-built Excel.
Hyundai addressed its
reputation for poor quality by vigorously improving its production standards
and introducing a 10-year warranty program in 1999.
It
launched its first luxury sedan -- the Genesis -- shortly before US
car sales collapsed to the lows not seen in decades in the wake of the 2008
financial crisis.
Hyundai
managed to expand market share during the downturn through clever marketing
that included a promise to buy back a customer's car if they lost their job
within the first year of purchase.
It
also won accolades for the Genesis, including the much-coveted car of the year
award at the 2009 Detroit auto show.
But
despite all that hard work, Hyundai
has still not shed its reputation as a cheaper alternative, said Jack Nerad, an
analyst at Kelley Blue Book.
"What
they're limited by is 'that's just a Hyundai' -- the perception of that's what
the brand is," he said in a telephone interview.
"The
current Genesis sedan...
it's a very good value, but has not resonated well sales-wise because people
buying luxury want to have the prestige of the brand."
Separating
its premium offerings into a separate brand could help boost their prestige.
It
worked when Honda, Nissan and Toyota introduced their Lexus, Acura and Infiniti
brands in the late 1980s.
"Figuring
out if this is successful isn't going to be determined by the first two cars
they bring over," said Stephanie Brinley, an analyst with IHS Automotive.
"It's
a long-term play, it's having to do it over and over again and how they build
that up."
Hyundai
announced the Genesis brand in November and plans to introduce it initially in
the United States, Asia and the Middle East. It will eventually expand into
Europe as the brand expands to six offerings by 2020.
"Our
ability to start fresh in this new era instead of having the legacy or burden
of what was in the past means we can start with something new and invest more
appropriately," said Mike O'Brien, vice president of corporate and product
planning for Hyundai Motor
America.
One
way to start fresh is to upend the traditional dealership experience by
offering customers valet service so they don't have to sit around waiting for
an oil change.
Instead,
someone will pick their car up from them and drop it back off when it's ready.
It
doesn't make sense to invest tens of millions of dollars into elaborate
showrooms, O'Brien said, when what today's customers really value is their
time.
Hyundai understands the
challenge of capturing a loyal Mercedes or BMW customer, O'Brien told AFP.
"Our
strategy is for those customers that are just getting ready to buy a luxury car
to give us a shot," he said in an interview on the sidelines of the show.
"That
is going to be our challenge: How do we make a more appealing shopping
environment so people give us a try?"
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