Hyundai hopes the luxury Equus sedan finds a niche in U.S.
HWASEONG, South Korea -- With Hyundai having found unlikely success selling luxury cars in the U.S., now it's toying with the idea of moving up in price point again — to $75,000 sedans.
It's exploring whether Equus, an updated large sedan that just went on sale in South Korea, can take on the BMW 7 Series, Mercedes-Benz S-Class and Lexus LS 460L in America.
Long known for cheap cars and a 10-year warranty aimed at dispelling a reputation for inferior quality, Hyundai is hoping its luxury strategy will burnish its image. It already has two luxury models in the U.S. under the name Genesis, a midsize sedan and a sporty coupe.
Success of the Equus "would decisively shift public opinion in our favor. It would be the capstone," said spokesman Oles Gadacz at Hyundai's Research & Development complex outside Seoul.
This summer, the South Korean automaker plans to ship 100 Equus luxury sedans to U.S. dealerships to quietly gauge what American customers think about the model. Equus also was displayed at the New York International Auto Show last month simply to gauge reaction. "We have modest expectations," Gadacz said.
Hyundai sold 6,021 Genesis sedans this year through April, Autodata says. Prices ranged from $32,250 for a V-6-powered version to about $42,000 for a fully loaded V-8 model. To lure luxury buyers, Hyundai is discreet about where its logos appear on the Genesis. Buyers so far have included those moving over from entry-level Lexus or BMW 3 Series, as well as those trading in Toyota Avalons or other large non-luxury sedans, says Art Spinella of CNW Marketing Research.
Jeff Schuster, executive director of forecasting for J.D. Power and Associates, says that while there is promise, Hyundai needs to worry about stretching its brand too far. But Milton Pedraza of the Luxury Institute says upscale buyers now yearn for value, not just sophistication, and there is room for a lower-price alternative luxury brand.
The larger Equus uses the same 4.6-liter, 375-horsepower V-8 as is found in Genesis. In South Korea, Equus comes in a chauffeur version with a rear-seat power leg rest and seat massage unit.
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