By Kim Hyun-cheol
Staff Reporter
Hyundai Motor is pinning its hopes on its luxury sedan Genesis to shed its image as a manufacturer of affordable cars and advance to the premium segment of the global auto market.
Reflecting this, is the company's unprecedented push in promotion.
The Genesis is Hyundai's first luxury sedan for the overseas market. Hyundai will first promote the model in the United States, and then in the emerging markets of China, Russia and the Middle East.
Starting with its Excel subcompact in 1986, Hyundai has a long history of trailblazing on foreign turf. As a newcomer, the best way to overcome the entry barrier was to adopt a quality-for-cost strategy. This strategy remains behind what Hyundai stands for.
High-end models, however, are what it takes for a car manufacturer to become a big player. Toyota introduced Lexus as an independent luxury name in 1989. Hyundai has launched a luxury brand to focus on strengthening its car brand and do away with its reputation of being a cheap carmaker.
Hyundai's efforts have bore fruit. Few can dispute that the company has raised its image in reliability. Its brand value last year was $4.45 billion, up 9 percent from the previous year, according to Interbrand Corporation, a global brand consulting company.
The outcome ranks Hyundai eighth among global players, trailing German's Audi, which Interbrand predicted Hyundai will surpass this year.
Genesis has gotten off to a good start, with 2,000 units sold in the United States. Cashing in on this auspicious start, Hyundai began a U.S. advertising campaign this week and has earmarked a marketing budget of $80 million, according to industry sources.
The company seeks to sell 50,000 Genesis models in the U.S. market, 10 percent of its regional sales target this year. This rosy outlook comes despite growing U.S. preference for small fuel-efficient cars amid soaring oil prices and a sluggish economy. A big selling point of the Genesis is its reasonable price, Hyundai sources said.
A Lexus ES350 sells for about $40,000, a BMW 5 Series starts at $44,000 and a Mercedes Benz E Class between $50,000 and $80,000. The Genesis is priced at $33,000.
"Brands with price competitiveness see robust sales when the global economy is sluggish, so we now have huge expectations for the Genesis," a Hyundai spokesman said.
Russia got its first look at the sedan at the Moscow International Automobile Salon 2008. Hyundai plans to start full-scale promotion right after the show. Thanks to an economic boom from sales of petroleum and gas, Russia is one of the fastest-growing markets for luxury sedans.
China is also a promising market for Hyundai, as demand for cars is expected to steeply rise in the wake of the Olympics. Hyundai is planning a grand launching road show next month starting in Beijing and going cross-country through major cities.
Promotions in six Arab countries ― Saudi Arabia, Oman, the United Arab Emirates, Kuwait and Syria ― will kick off in October.