When news began surfacing last summer that Hyundai would bring a new luxury car to the States, we started thinking that perhaps the company was on the front end of separating its luxury cars from the rest of the brand.
The well-regarded Hyundai Genesis was (and still is) selling well, and the Hyundai Equus could follow in its footsteps when it arrives later this year. Now, according to a memo obtained by Ward’s Auto, Hyundai does appear to be laying the groundwork for creating a new luxury brand the way Toyota created Lexus.
Hyundai Motor America wants its U.S. dealers to create a special “showroom-within-a-showroom” atmosphere for showcasing the South Korean auto maker’s Genesis and upcoming Equus luxury lines.
The Genesis is the most expensive car Hyundai has built so far, but the Equus, which could see prices around 50 to 60 grand, will take that title when it appears. I for one have been wondering just how high a price the Hyundai brand name can support. So far, it’s been able to justify 30 to 40 grand for the Genesis, mostly because that car still represents a value when going up against the BMW 5 Series.
The Equus, though, will be going up against the BMW 7 Series and entering a price point where “value” is a much trickier proposition. Buyers of the 7 Series or Lexus LS are paying for a brand cache that Hyundai doesn’t offer.
But with the right planning and the right marketing, a new brand (called Genesis, maybe) could someday support prices in the 50-to-60-thousand-dollar range and still offer a perceived value when compared to cars costing 80 to 100 grand.
Hyundai is entering a complicated area of marketing and branding, but it is doing it right. Separating Hyundai luxury cars from the cars us common folk buy is smart and can only result in continued success.
Will luxury car buyers take Hyundai seriously, even with a new luxury brand name? I think so. In fact, I think Lexus and BMW should already be planning a response.