Hoovey689

iTrader: (16)

How the Koreans are cracking the luxury market

Anyone who visits Seoul after a few years absence is likely going to be in for a shock. What was, not that long ago, a decidedly third-world city is today a thriving, sprawling metropolis increasingly on a par with the world's most modern cities.

So it should come as no surprise, perhaps, that South Korea's two largest automotive brands are no longer the same companies they were when they first entered the world stage more than two decades ago. Gone are the "cheap and cheerful" products – a polite euphemism for entry-level junk – like the original Excel from Hyundai or the Aspire, the subcompact Kia built for former partner Ford, and which critics often derided as the "Perspire" due to its lack of power and amenities.

Kia, the smaller of the two sibling makers, recently confirmed what has long been rumored, revealing plans to introduce its first true luxury sedan. And Kia's ambitions are far from modest, its new K900 takes direct aim at the top of the premium luxury segment, where models like the Mercedes-Benz S-Class and BMW 7 Series live.

Hyundai, meanwhile, already has a car in that class, the full-size Equus. But its big news for the year ahead will be the debut of an all-new version of its own first rear-drive luxury car, the Genesis. You can be sure folks will be taking a close look at what Hyundai has in store considering the unexpected hit it delivered with the original Genesis sedan, named North American Car of the Year shortly after its debut.


For the 2015 model, as seen in the spy photo above, Hyundai is no longer content to go with derivative styling. The "me-too" look of the original Genesis sedan has been replaced with a more distinctive, coupe-like shape – as well as a number of intriguing technologies – that seems determined to tell the world the Korean auto industry is no longer taking a back seat to any of its competitors.

The new model will be a "game-changer," contended Moon Sik Kwon, head of Hyundai Motor Group's R&D Center, located just outside the Korean capital of Seoul, as he pulls the covers off the 2015 model for the first showing to a group of US automotive journalists.

Korean cars "used to be one step above a Yugo," agreed Joe Phillippi, a long-time automotive analyst and head of AutoTrends Consulting. "They've totally turned the company on its head," he said, referring to the giant conglomerate that now controls both Hyundai and Kia.

That's not to say either of the two marques have walked away from their traditional audiences. But even their most basic models, such as the $15,340 Hyundai Accent and the $14,400 Kia Rio, have recently gone through stylish remakes and offer the sort of performance and features one traditionally wouldn't expect of the econoboxes that once dominated the Korean line-up.

Will models like Accent and Rio remain in the model mix? That's a matter of debate. "Clearly," Phillippi says, "the Koreans have recognized that the Chinese will eventually come in after them – and under them. " So, he says he wouldn't be surprised to eventually see such low-end base models go away – or continue to move more upmarket, along with the rest of the Hyundai and Kia lineups.

While Korean officials aren't ready to confirm that strategy, they do acknowledge their interest in expanding their premium offerings. Hyundai R&D Chief Kwon confided to me that there is clearly more in the works.

Specifics? Not ready to discuss, though it would appear that there are a number of models covering a wide range of potential luxury segments, including those between the latest Genesis and the big Equus models. How soon, "Not right away," he cautioned, the implication being it would be at least sometime into the second half of the decade before you see that potential flood of high-line products. Clearly, Hyundai wants to be sure the Gen-1 Genesis wasn't a fluke before going all-in.

As for Kia, the maker isn't entirely walking away from its traditional approach, even as it moves upmarket. The K900 may not be an econobox but, Kia officials recently suggested, the strategy is to offer "a (BMW) 7 Series value for a 5 Series price" – language similar to what Hyundai officials expressed when they launched the Genesis and Equus.

One hint of the maker's intent was hiring Peter Schreyer, long associated with highline European marque Audi, where he was its chief designer. The well-regarded Schreyer has since been promoted into one of the top overall management positions at Kia and, you can bet, he's looking for ways to take on his former employers back in Germany.

Notably, Kia has indicated it has even more ambitious goals for the K900, planning to sell perhaps 5,000 a year, double what was considered successful demand for the Hyundai Equus.

It wasn't all that long ago that Korean cars were the butt of jokes – and the option of choice for only the most credit-challenged and parsimonious motorists. No longer. The reputation of both Hyundai and Kia are still in flux, but they clearly have improved their collective image and are now drawing far more affluent and discriminating buyers. While sales of Korean luxury cars still lag far behind key European, Asian and American brands, few of those competitors are ready to write Hyundai and Kia off anymore – doing so only at their own peril.

http://www.autoblog.com/2013/11/19/h...luxury-market/

nabbun

Hmmm, still wouldn't buy a current gen Hyundai or Kia for myself. I'll have to take a look at the new Genesis to see if it's up to my expectations. Lexus has pampered me with their fine vehicles. However, Hyundai isn't afraid to offer things like a V8 in a car the size of a Gensis. Meanwhile, the GS loses the V8 in favor of only 1 engine choice. We'll see how it goes. Price is one thing and I know you get a lot for your money with Hyundai/Kia but, saving money isn't everything when it comes to cars for me. If price was everything, I'd be driving the new Toyota Corolla base model.

I8ABMR

I wouldnt buy one right now either but I do love the Optima. I think these guys are making more progress than I have ever seen in a small auto company in such a short period of time

nabbun

Yes. This is very true. They're making their way up to the top very quick. However, they aren't quite at the top yet. I'm glad to see more manufacturers getting into the mix and duking it out. Keeps companies like Toyota on their toes

TangoRed

If this doesn't have a decent ride/handling balance I don't even want to hear it. Kia and Hyundai really need to invest in that area.

spwolf

Hyundai is huge conglamorate and bigger car company than a Honda. 4th biggest car company in the world.

I dont think they will ever stand a chance without building a new brand. Selling 400 cars per month in market where BMW/MB/Lex sell >20k is really nothing.

bitkahuna

iTrader: (20)

how do you define 'the top'? i don't think rolls royce is worried.

I8ABMR

I didnt know they were the 4th largest in the world. No wonder they are making strides. They have the R&D team working

spwolf

their R&D went up only in last few years... Hyundai as a company does everything, they own department stores in Korea, build cranes, etc, etc.

OKSTANCE

CAN THEY SERIOUSLY NOT OFFER A DIFFERENT KIA LOGO WITH JUST A K??

it ruins an otherwise very competitive luxury targeted car IMO
i should look into making some for the turner market and make bank ;P

nabbun

lol you know exactly what I mean! The biggest players in their respective car segments.

Toyota, Honda, etc.

Infra

iTrader: (1)

Hyundai and Kia have been making very handsome cars, but the interior still feels like an econobox in the last Optima I drove (last year). Also, it had a digital fuel gauge, which I don't understand - it can't really save money compared to an analog gauge, and the analog is much more precise in its readings (if not measurements). You can correct for consistent measurement bias, not so much for inconsistent reporting.

Whitigir

Yepe! Hyundai is one of the giant company, so is Mitsubishi, but that doesn't mean that they can produce Quality automobiles. That is the same for Mitsubishi, I just can't take Mitsubishi seriously anymore, beside the Evo. Despite being as good as the Evo, I totally lost interests in it, because the company is like disappeared from the market, I don't want to entrust my money into their vehicles. I can see an STI is way worth it now.

I wouldn't buy a Hyundai or a Kia for a Luxury ride either. I seriously doubt their engineering together with cheap labors to produce these cheap vehicles.

I do see that Hyundai is doing better and gaining up Reputations and all, but I still would not touch a Hyundai.

I would still go with Lexus every time, it is not because I am a fan of a Specific Brand such as Toyota. But I believe in their products as my whole family had been with them, and non of them failed one of us yet, even a 15 years old camry never left us on the side of a Highway/street.

After Lexus, I would look into Nissan, or infinity.

mmarshall

Actually, IMO, Hyundai reached its peak in vehicle design and solidity around 2005-2006.....and the latest models, IMO, are a step down in several areas.

TRDFantasy

Lol at that headline. Didn't read the article at all, but already know it's another empty Autofail article that's nothing more than a PR fluff piece.

This is the Korean trend, how most Korean companies are operating; gimmicks, flash, and stylized elements over substance, quality, durability, and craftsmanship.

None of the modern Hyundai or Kia products have class-leading interiors. Their interiors are full of flashy, gimmicky styling but quality-wise they still have a lot of econobox elements to them, and fit and finish is average at best. Let's not even talk about craftsmanship or long-term durability.

Yes there are a few Korean companies that make quality products, but they are exceptions, not the trend.