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Hyundai Talks About Its Move Into the Luxury Market

June 29, 2011
3 min to read


PALO ALTO – It was almost a year ago when Hyundai’s U.S. chief, John Krafcik, and I were driving too fast down a winding hill in the forests near Stanford University to test the brakes on the Equus, an unlikely new competitor in the tony S-Class, 7-series set.


I was asking the question – How is Hyundai doing it? How has Hyundai, in the span of five years or so, gone from an afterthought to the fastest growing automaker on the planet? Krafcik said: “We started setting goals beyond what we knew we could hit.” And then they hit those goals.

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The Equus, a $58,000 luxury car with more bells and whistles than the $90,000 Mercedes-Benz it competes against, is just one element of Hyundai’s continued willingness to do things that violate the industry norms. It was the second luxury vehicle the company began selling under the Hyundai badge, after the Genesis full-sized sedan. The Equus has sold 1,171 through May and appears to be on track for the company goal of 2,500 for the year. Meanwhile, the Genesis sold 29,000 last year, more than an Audi A6 and in competition with the BMW 5-series.


Hyundai remains steadfast in its decision to keep its line of luxury vehicles under the Hyundai name. CEO Steve Yang talks about it in today’s story in The Wall Street Journal.


“We are not interested in a premium brand. We know several companies approached the premium brand. But as far as we know, only Toyota was successful. If people want to think of Genesis as a premium brand, that’s OK. But it’s a Hyundai,” Mr. Yang said.


Hyundai executives have said the company is considering a new compact rear-wheel-drive car that would compete against BMW’s 3-series as well as a crossover sport utility in the RX 350 space. Early on it was easy to scoff at Hyundai’s luxury ambitions, but it has become less so. The company continues to grow market share in the U.S. and abroad.


It has now become the practice that as Hyundai launches each new vehicle, executives put up slides with side-by-side comparisons of models from Honda, Toyota, GM and Ford. Hyundai models often cost less and come standard with more options and have more horsepower and better fuel economy. The latest product from Hyundai is the compact Accent. It starts at $12,500, is bigger and cheaper than a Ford Fiesta and gets better mileage.

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Earlier this year, Journal auto reviewer Dan Neil wrote a review of the new Elantra compact, which has sold incredibly well since its debut. Here’s an excerpt:


“Except for the fact that it’s not particularly fast, the Hyundai Elantra is a bullet, and that bullet just whistled past Ford’s head. Or maybe grazed its skull. “Hyundai’s freshly redesigned compact sedan—handsome, roomy, richly detailed and stacked to the rafters with standard and optional amenities—would be the best car in its segment (among cars such as the Honda Civic, Toyota Corolla, Chevy Cruze and Volkswagen Jetta), but for the inconvenient existence of the 2012 Ford Focus.”

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