Hyundai Gearing Up for New Luxury Brand?

Hyundai Equus

Hyundai wants the Equus and Genesis seperated from the rest of the brand's cars at dealers

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.

Ward’s says:

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.

Hyundai GenesisThe 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.

-tgriffith

7 Comments

  1. I’m not sure resale value is going to have any noticable affect on new car sales to the mass public. Lexus doesn’t hold up as well as Infinity on that point. I think you are going to have people that want an option of a higher end car, that for some reason are prejudiced against german marques. This market will be where they excel. WalMart tactics should work just fine for them.

  2. I don’t believe Hyundai can pull off this marketing ploy until they are able to establish a name for quality, dependability, and above all other factors, show that their brand(s) can keep their resale value. So far they have done a good job on the first two, though many skeptics remain. The third one however, has been an abject failure. Their sister brand, Kia suffers from the same malady. The company’s resale values are not holding their own, in fact, I will go so far as to say that they are a disaster. The bright star and hope for the brand is the Genesis. If after two more years they are able to hold 60% of their MSRP, I’d say they have a fifty fifty chance of succeeding and then only if they keep their entries limited.

  3. I think Hyundai is headed in the right direction with the genesis, now they just need to release a little 2 door version of it.

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